The Valuation Tribunal Service Annual Report and Accounts ...

The Valuation Tribunal ServiceAnnual Report and Accounts 2004-2005

(HC246)

The Valuation Tribunal Service Annual Report and Accounts 2004-2005

Presented to the House of Commons pursuant to section 7 of theGovernment Resources and Accounts Act 2000

Ordered by the House of Commons to be printed 14 July 2005

HC246 London: The Stationery Office £20.50

Page No

Foreword by Chairman 3

Outline of what we do 5

Organisational structure 6

Report on corporate governance 10

Highlights of the year by Chief Executive 12

VTS’ Public interests and other matters 15

Tribunal and Judicial Matters 17

Working Committees 20

Report on Human Resources matters 21

Report on Information Technology 24

Report on training 25

Report on estates 27

Forward look by Chief Executive 28

Foreword to the financial statements 30

Financial summary 32

Statement of the Board’s and Chief Executive’s responsibilities 34

Statement on internal control 35

Report by the Internal Auditors 38

The Certificate and Report of the Comptroller and Auditor General 40to the House of Commons

Income and Expenditure account 42

Statement of Total Recognised Gains and Losses 43

Balance sheet 46

Cashflow statement 47

Notes to the accounts 48

Appendix 1 Accounts direction 75

Appendix 2 Workload statistics 80

Appendix 3 Presidents of Tribunals 86

Appendix 4 Business plan milestone 88

Appendix 5 Glossary of pension technical terms 101

Appendix 6 Map of administrative units 103

Contents

2004-2005

The Valuation Tribunal Service Annual Report and Accounts

Foreword by Chairman

It is a privilege to present to you thefirst Annual Report of the ValuationTribunal Service (VTS). The preparationof this document has been a reminderto all of us in the service of what hasbeen achieved in this first year, andthe story it tells is a testament to thehard work and commitment ofour staff.

When a new body is created, it isimportant to ensure that there is nodisturbance to the core service beingdelivered. Everyone has worked hardto ensure stability and continuity.Staffs have continued to servicetribunals, to participate in trainingevents, to undertake special projects,to help to plan and deliver new initiatives, and to adapt to a new corporate structure.

The new Board of the Valuation Tribunal Service has developed over the year into astrong and complementary team. With enthusiastic and focussed support from theChief Executive and his team, the Board has established the key governanceframework. With that in place, the Board could then turn its attention to the future,and the proposals it wished to make for development of the service. It is a tribute tothe speed at which the Board and the executive team began to function effectivelythat steps taken over the year have already produced some cost reductions andsavings in the service.

A particular feature of the year has been the opportunity to meet and talk with alarge number of members of the fifty-six valuation tribunals across the country. Over

2004-2005

3The Valuation Tribunal Service Annual Report and Accounts

“Over eleven hundred people participate as members,chairmen or presidents of tribunals, all of them asvolunteers. I pay tribute to their commitment to publicservice and their eagerness to provide a customerfriendly hearing for those appearing at tribunals.”

eleven hundred people participate as members, chairmen or presidents of tribunals,all of them as volunteers. I pay tribute to their commitment to public service and theireagerness to provide a customer friendly hearing for those appearing at tribunals.

Our Annual Report is the opportunity to reflect on what has been achieved, and thelessons learnt over the past year. It is also the opportunity to say some importantthank yous – to staff, to tribunal members, to Board members and to other partnersand stakeholders, all of whom have contributed to the success of the year.

Anne Galbraith Chairman, Valuation Tribunal Service

20 June 2005

2004-2005

4 The Valuation Tribunal Service Annual Report and Accounts

Outline of what we do

The VTS was created as a corporate body by the Local Government Act 2003 andwas formally established on 1 April 2004 as a Non Departmental Public Body (NDPB),sponsored by the Office of the Deputy Prime Minster (ODPM). It comprises achairman and members, who are appointed by the First Secretary of State, andcommonly referred to as the ‘VTS Board’.

The VTS is charged with providing or arranging for the provision of the servicesrequired for the operation of Valuation Tribunals in England, in particular:

• accommodation;

• staff (including clerks to tribunals);

• information technology;

• equipment;

• training for members and staff of (including clerks to) tribunals; and

• for giving general advice about procedure relating to proceedings before tribunals.

The VTS has a Chief Executive’s Office based in London with a permanent staffof 12. There are a further 148 staff employed in 14 administrative units, serving56 valuation tribunals, to provide guidance and general support to a lay membershiptotalling 1,198.

Valuation tribunals have jurisdiction in hearing appeals against:

• non-domestic rating;

• council tax valuation and liability;

• completion notices;

• drainage assessments; and

• failure to provide requested rental information.

The VTS is resourced from public funding and is responsible and accountable for itsactivities. The VTS works in accordance with a corporate governance framework andrequirements laid down by its sponsoring department.

2004-2005


Organisational Structure

2004-2005


Anne Galbraith OBEChairman

Paul Wood OBEDeputy Chairman

Maurice Crosswell Edward Gunby Peter Lawton Irene Robinson Michael Tildesley

The Board consists of seven members, including the Chairman and Deputy Chairman,the majority of whom are presidents of Valuation Tribunals.

Members of the Board during 2004-05 were:

* (10 meetings held in 2004-05)

1 assigned by the Board to chair a regional training event for members. Therefore Maurice Crosswell was able to attend amaximum of nine meetings.

2 appointed 13 July, Peter Lawton was able to attend a maximum of seven meetings.

3 resigned 4 July 2004. Lionel Campuzano was able to attend a maximum of three meetings.

Anne Galbraith OBE Chairman 10 1 April 2004 31 March 2006Paul Wood OBE Deputy Chairman 10 1 April 2004 31 March 2006Maurice Crosswell1 Board Member 9 1 April 2004 31 March 2006Edward Gunby Board Member 10 1 April 2004 31 March 2006Peter Lawton2 Board Member 7 13 July 2004 31 March 2006Irene Robinson Board Member 10 1 April 2004 31 March 2007Michael Tildesley Board Member 9 1 April 2004 31 March 2007Lionel Campuzano3 Board Member 3 1 April 2004 4 July 2004

Number of board Appointmentmeetings Appointment ends/

Board Members Position attended* started Resignation

The VTS Board

2004-2005


Audit Committee

The Audit Committee consists of four members of the Board. The work of thecommittee includes reviews of:

• internal control and risk management;

• the internal audit programme, considering the major findings of internal auditinvestigations (and management’s response), and ensuring co-ordination betweenthe Internal and External Auditors;

• external audit reports, including performance reports and annual audit letters,together with the management responses; and

• the annual financial statements.

Members of the Audit Committee during 2004-05 were:

* 4 meetings held during 2004-05

1 qualified accountant

2 appointed 13 July 2004, the maximum possible audit committee meetings Peter Lawton was able to attend was 3.

Irene Robinson1 Chairman 4Maurice Crosswell Member 4Peter Lawton2 Member 3Paul Wood OBE Member 4

Number of Committee Audit Committee Members Position meetings attended*

Remuneration Committee

The Remuneration Committee consists of three members of the Board. The work ofthe committee encompasses making recommendations to the Board and ODPM onthe terms of service and remuneration of the Chief Executive, Directors and staffhaving regard to appropriate comparator organisations.

Members of the Remuneration Committee during 2004-05 were:

* 3 meetings held during 2004-05

Edward Gunby Chairman 3Anne Galbraith OBE Member 3Michael Tildesley Member 3

Number of CommitteeRenumeration Committee Members Position meetings attended*

2004-2005


Chief Executive and Accounting Officer

Laurence Barnes is the Chief Executive and Accounting Officer of the VTS. He is responsible to the VTS Board for the day-to-day operational and financialmanagement of the VTS in his capacity of Chief Executive, and directly responsible toParliament in his role of Accounting Officer.

Executive Management Team (EMT)

Laurence BarnesChief Executive

Gilbert GeorgeResource Director

Antonio MasellaCorporate Director

Laurence Barnes Chief Executive 1 April 2004 31 March 2007Gilbert George Resource Director 1 April 2004 PermanentAntonio Masella Corporate Director 1 April 2004 Permanent

Name Position Appointment Appointmentstarted ends

The role of the EMT is to implement operational and strategic Board-approved plans,and provide strategic direction for staff.

Members of the EMT during 2004-05 were:

2004-2005


Kate Adams SouthernJon Bestow EasternRichard Bowater MBE East MidlandsMalcolm Buckland Home Counties NorthMurray Campbell Thames ValleyIan Coates Home Counties SouthLarry Goddard London NorthBrian Hannon South WestJohn Hewitson West MidlandsMavis Latham YorkshireDavid Phillips WessexLesley Rutherford NorthernAndrew Shipsides North WestVincent Turner London South

Name Admin unit

Senior Management Team (SMT)

The EMT are also members of the SMT, which provide the day-to-day operationalcontrol. Other members of the SMT hold the position of Heads of Administration.During 2004-05 these were:

The VTS was created by the Local Government Act 2003, which laid down thefunctions that the service must fulfil. The Act has been supplemented by aManagement Statement and Financial Memorandum produced by ODPM, andagreed on behalf of the service by the Chairman of the Board. These documents setout the expectations of our sponsoring department. Board members are issued with acode of practice on their appointment, to which they must conform. The Act andthese other documents set the framework within which the service must function.

For the VTS as a new organisation to operate at arms length from a sponsoringdepartment, and in line with best practice for public bodies, there has therefore beena need to put into place a detailed system of corporate governance. This process:

• ensures due process, propriety and scrutiny;

• provides the policy and planning framework for operations and administration;

• provides a comprehensive and auditable system of accounting and process; and

• details the requirements for effectiveness, efficiency and sound public service.

An overarching framework of governance was drafted and agreed prior to formationon 1 April 2004, and this covered some 80 aspects of process and policy. The majorityof items required attention in the immediate period before and after formation.In particular, the focus was placed on the requirements of setting up a new Board,establishing an independent financial system for taking over the pay andprocurement from ODPM, and restructuring the employment and managementpractices to take account of the changes.

The financial aspects of governance are a good example of the level of detail thatwas required. From among a wide range of activities this provided comprehensivestanding financial instructions; levels of internal control; new accounting processeswith cost centre management; fraud and fraud response plans; a wide range ofpolicies to cover travel and subsistence, and an examination of the usage of suchitems as mobile telephones and laptops. The entire accounting, procurement andpayroll processes also required comprehensive new procedures to reflect the newstatutory position. In addition, the audit functions and the Audit Committee of theBoard were set-up, and both internal and external auditors were appointed.

Such a level of detail was repeated in most other aspects of setting up the VTS Boardand the service including human resources, training, information technologyfunctions, internal and external communication, risk management, estates and theprocess of corporate development.

The VTS Board and head office staff undertook a very heavy workload during theperiod April – September 2004 to write, develop, discuss, refine and agree the bulk

Corporate Governance

2004-2005


2004-2005


of the governance requirements. Some papers were created as ‘living documents’ tobe reviewed at regular intervals during the year, and the remainder will be reviewedannually. The governance requirement does not stop here. There are always newobligations or initiatives led by regulations, best practice, new developments orsimple experience, particularly with human resources or aspects connected withfinance and accounting. The Board and staff therefore have a continuousinvolvement with governance arrangements.

The corporate governance framework is itself subject to audit and this process wascompleted in April 2005. The report by our internal auditors found that, after such ashort period, there was basically a sound system of governance, and made only thefollowing minor recommendations to achieve greater control:

• introduce independent members to the Audit and Remuneration committees ofthe VTS Board;

• assess Board members’ skills, to inform future training;

• develop an induction pack for new Board members;

• periodically review Board members’ declarations of interests; and

• revise the code of conduct for staff.

The auditors commented most favourably on the quality and scale of the frameworkachievement within the relatively short timescale.

The VTS Board will undertake an annual review of its effectiveness, and the first ofthese will take place in June 2005. The Chairman of the Board appraises individualBoard members and the Chief Executive, whilst ODPM formally appraisesthe Chairman.

This has been a challenging year forthe VTS and for Valuation Tribunals.Although the current strategicdevelopment plan consultationhighlights the potential changeprogramme ahead, there has alreadybeen a considerable transformationprocess over the year that has beenunheralded, successful and acceptedwidely by both staff and members.

We have brought together, under aTUPE framework, a staff thatpreviously had 56 different employers(with up to 56 ways of operating) andintroduced clear line managementstructures and new working practices.Most have welcomed the moreconsistent and coherent approach with staff, a greater sense of corporateresponsibility and understanding, and a bottom-up approach that captures ideas andpromotes inclusivity. Balanced with this has been the need to retain and promote thestrong partnership ethic between staff and members, with sound lines ofcommunication. An additional responsibility has been the establishment of a headoffice to draw together the corporate threads and bring together the work previouslyundertaken by ODPM and the Valuation Tribunal Management Board. The magnitudeof this work has not always been understood fully, despite the wholesale transfer ofresponsibilities and functions from the sponsoring department.

A notable new element of work has been the establishment and smooth operation ofthe VTS Board. It is a credit to the predecessor Valuation Tribunal Management Boardthat the transition to the new VTS Board, and its responsibilities, went very smoothlywith some key personalities providing continuity across the entire organisational

Highlights of the year by Chief Executive

2004-2005


“Most have welcomed the more consistent and coherentapproach with staff, a greater sense of corporateresponsibility and understanding, and a bottom-upapproach that captures ideas and promotes inclusivity.”

2004-2005


framework. The work of the Board has been split this year into three main functions:establishing the corporate governance of the organisation; maintaining the normalmonitoring and review function; and developing the strategic planning. Thegovernance issues covered all disciplines ranging from Board orders and procedures;reporting and business planning, audit responsibilities; anti-fraud initiatives; payrollcontracts; IT and training strategies; and a plethora of human resource policies. In all,around 80 aspects of governance procedure were covered, and many of these have aregular place on the agenda to fulfill the Board’s monitoring, audit and policyfunction. The monitoring and review function covers not only the finances of theorganisation, but also workload statistics and a review of complaints.

Into the autumn of 2004, the Board started to turn its attention to strategicdevelopment. Thereafter it spent some five months in regular discussion and writtenreview on how the VTS and valuation tribunals might be developed together inpartnership. This needed to be undertaken in a way that rationalised processes andstructures, yet retained the core ethos and spirit of local justice, enhanced customerfocus and would be, of course, affordable over the medium term. A wide-rangingconsultation paper proposing a five-year development plan was circulated to all staff,members and external stakeholders at the end of February 2005, looking at theappeal process, staff structures and responsibilities, tribunal structures, and a widerange of member appointment and retention issues. The consultation period closedat the end of May 2005, and the Board is committed to announce its final decisionsand recommendations on the way ahead by the end of July 2005.

Part of the ongoing governance responsibility of the Board has been to undertake astatistical analysis of the workload and review the progress of appeals. The Boardtook the view that a wholesale change to the process of appeals was well overdueand the current system was wasteful, bureaucratic and lacked customer focus andchoice. A new system of Appeals Direct has been proposed to provide greaterseparation between the Valuation Office Agency (VOA) and the VTS which enhancesjudicial independence, allows for more effective case management, and customerchoice. In the VTS’ view, it would also be a decisive move towards best practice in thetribunal world. In addition, Appeals Direct would reduce bureaucracy and introduce amore effective and efficient system. In a significant step towards this, the VTS and theVOA have together carried out a trial in the North West region on listing after targetdate, the outcome of which is under review and may provide a common approach onlisting. The VTS has actively developed Appeals Direct during the year, and are of theview that this represents both an effective way forward and the best choice for theratepayer. A case will be placed before the Minister for review, and it is possible thatAppeals Direct could be introduced for the council tax revaluation in April 2007.

Prior to this, and representing a significant workload during the past year, has beenthe preparation for the non-domestic rating (NDR) revaluation that took place in April2005. This entailed a great deal of ‘behind the scenes’ work on our InformationTechnology (IT) systems to ensure that additional software packages were added andthat they worked smoothly within the existing system. No detailed examination ofthe application of Appeals Direct to NDR will take place until after the Council Taxrevaluation in 2007.

Finally, it should not be forgotten that all of these events have taken place against abackdrop of continuous change and adaptation, and against demanding businessobjectives set by the Board and agreed with ODPM and placed in the annual plan.The Business Plan for 2004-05 set targets for implementing structures and processes,and reporting the progress of mainstream business achievements and milestones.At the end of the 2004-05 financial year the vast majority of the objectives containedwithin the Business Plan were achieved completely, and the remaining few achievedto within 80%, an outcome that the Board and the sponsoring department havecommended.

2004-2005


VTS’ Public interests and other matters

2004-2005


Equality and diversity

The VTS is fully committed to equality of opportunity in the workplace, and strives toensure that all job applicants are treated fairly regardless of sex, age, race, disability orreligion. The aim of the VTS is for its workforce to reflect the diversity of society atlarge and customers with whom the VTS interacts. The VTS respects the dignity andworth of each individual that makes up its workforce, as well as the diverse andpositive contribution that they make in shaping the VTS’ policies and delivering itsservices at the front line.

Disability

We value the skills and experience that disabled people bring to the workforce andwish to make full use of the talents of disabled staff and members, and to beuser-friendly towards appellants with disabilities. The VTS has carried out significantworks on its estates in order to comply with the Disability Discrimination Act (DDA).This cost was in excess of £200,000 for the 2004-05 financial year, with a further£110,000 earmarked for the financial year 2005-06.

Health and safety

The VTS publishes a Health and Safety Policy and is fully committed to the health andsafety of all our staff, valuation tribunal members, and other persons who arelawfully on VTS premises.

In 2004-05 there were 20 recorded accidents involving VTS staff, of which none wereclassed as reportable (more serious), and none resulted in absence from work. Interms of injuries, 12.5% of staff involved in recorded accidents suffered minorinjuries. There were no reportable injuries sustained.

The VTS monitors its statutory responsibility through its Health and Safety Committee.

Conserving energy, reducing waste and minimising therelease of greenhouse gases

We are currently developing a sustainable development strategy that will build intoour policies and practices.

How the VTS would introduce the Euro

The ODPM requested the VTS to prepare a high level plan of how the VTS wouldprepare for the introduction of the Euro should a decision be taken for the UK toadopt the Euro currency. A high level plan has been drafted and approved by theODPM and the VTS Board. The VTS plan was also subject to a government gatewayreview by the Office of Government Commerce.

Freedom of Information Act

The Freedom of Information Act 2000 (FOI) received Royal Assent on 30 November 2000.

FOI gives individuals two distinct rights:

• the right to be told whether the information exists; and

• the right to receive the information, where possible in their preferred format.

The VTS has received approval from the Information Commissioner in accordancewith section 19 of the FOI Act of its publication scheme, which gives details of theclasses of information that the VTS makes available proactively and how they areaccessible. This approval has been granted for the period from 24 March 2005 to29 February 2008.

Details of company directorships and othersignificant interests

A register of Board members’ business interests is held by the Resource Director atthe following address:

Chief Executive’s OfficeBlock OneAngel Square1 Torrens StreetLondon EC1V 1NY.

2004-2005


Workload report

At the beginning of 1 April 2004, a total of 299,7781 appeals were carried forward tothe 2004-05 financial year.

As at 31 March 2005, a total of 310,9811 appeals have been cleared against a totalappeal clearance benchmark agreed with the Valuation Office Agency of 303,3081.

During the year under review a total of 5,462 tribunals were scheduled in England, ofwhich 4,229 actually met.

A total of 271,966 appeals were listed on tribunal agendas in preparation for ahearing:

• 21,476 appeals related to council tax.

• 250,490 appeals related to non-domestic rating.

Valuation tribunals issued a total of 41,553 decisions during the course of thisfinancial year:

The average operational cost of clearing an appeal was £34.71 per case(2003-04 £38.182).

During the course of the year, the VTS has concentrated on the disposal of appealsolder than 12 months old. As at 31 March 2005, the number of appeals in excess of12 months old has reduced to 33,361. In terms of Rating Lists, this figure breaksdown as:

• 2000 Rating List – 32,327

• 1995 Rating List – 738

• 1990 Rating List – 296

1 Appendix 2

2 source Annual Report produced by Valuation Tribunal Management Board

Judicial matters

In the run up to the launch of the VTS there was concern over how membersinterests would be properly represented and how the partnership of the judicial andexecutive arms of the service would function.

To find an effective way forward the ODPM, our sponsoring department, launched apublic consultation in the summer of 2004 on Sustaining the Judicial Independenceof Valuation Tribunals. As an interim measure, whilst the consultation was takingplace and until the outcome was known, a two-part Tribunal Liaison Committee (TLC)

2004-2005


Tribunal and Judicial Matters

was established. The members’ part consisted in the main of those Presidents whohad formerly been members of the National Association of Valuation Tribunals (NAVT)committee, and this was chaired by Peter Jewell, President of the Herefordshire andWorcestershire Valuation Tribunal. A part two meeting, with nominated Boardmembers, was chaired by the VTS Chairman. Peter Kain, Clerk to the London SouthWest Valuation Tribunal, acted as the TLC Secretary.

ODPM received a significant number of responses to the consultation document.After an analysis of the responses and further consideration of the issue, the Ministerissued a decision that the VTS should establish two committees. These would be aMembers Judicial Committee (MJC) consisting of elected Presidents from each of thetribunal groupings within administrative units of the VTS, and a Judicial InterfaceCommittee (JIC) consisting of three elected representatives of the MJC and threeBoard members.

Elections to the new MJC took place during March 2005 and the currentmembership is as follows:

2004-2005


Mr John Birkbeck Cornwall VT South West AUMr Derek Carline Kent VT Home Counties South AUMr Tony Craig Central London VT London North AUMr John Dunning Norfolk VT Eastern AUMr Lyell Fairlie Hampshire North VT Southern AUMr Ian Irvine Teesside VT Northern AUMr Peter Jewell Herefordshire & Worcestershire VT West Midlands AUMr Aubrey John Oxfordshire VT Thames Valley AUMr John Jones Bedfordshire VT Home Counties North AUMr Tony Ritchie London South East VT London South AUMr David Sheard West Yorkshire VT Yorkshire AUMrs Clementine Smith Severnside VT Wessex AUMr Jeremy Smith Cheshire VT North West AUMr Martin Suthers Nottinghamshire VT East Midlands AU

Name Tribunal Administrative Unit

At the first meeting of the MJC on 12 April 2005, Peter Jewell was elected asChairman. Pauline Sans, Clerk to the Manchester North and South ValuationTribunals, was appointed as its Secretary. Both the MJC and JIC will meet quarterly.

A further issue of significance to tribunals was a request to the VTS from the Minister,for advice on a number of matters concerning the structure of the service and relatedmatters on the appointment of members, chairmen and presidents, and the processinvolved in making an appeal. The Minister had made it clear at the launch of the

2004-2005


VTS on 1 April 2004, that it was his intention to review the regulations governingvaluation tribunals to take account of best practice and the transition to NDPB status.The Board gave extensive thought to the questions raised by the Minister andproposed a number of changes to the regulatory framework, which it included in thestrategic development consultation document circulated in February 2005. Followingthat, in March, the VTS held eight regional roadshows for staff and members oftribunals, at which the proposals were presented and views and comments on themwere invited. The consultation ended in May 2005, after which the Board has beentaking stock of responses and preparing its recommendations and advice tothe Minister.

We have said goodbye to a number of long serving presidents during the last year,though some remain with their tribunals as chairmen. We formally record our sincereappreciation for the many years of voluntary service to valuation tribunals byCharles Magee (Durham), Stephen Evans (Warwickshire), Howard Singh (Suffolk),Barry Hibberd (London NE), Henry Cator (Norfolk), Tony Cox (Hampshire South) andBill Belcher (West Sussex). We welcome in their stead (respectively) Ray Bennett,Roy Taylor, Peter Lawton, Jay Patel, John Dunning, Murray Bell and Brian Hill.

Each tribunal has also seen a number of members retiring on reaching the age limitof 72. This is prescribed by regulations and is one of the matters being considered inthe consultation exercise. We pay enormous tribute to those who have served, asvolunteers, on the various tribunals. Their valuable contribution and strong sense ofpublic duty is rightly recognised by each of the respective tribunals at their AnnualGeneral Meetings.

Our current membership of tribunals stands close to 1,200. There is wide recognitionin the service that the membership is too large and, as members leave, most tribunalsare not recruiting. Instead they are actively encouraging remaining members toconsider concurrent appointment to adjacent tribunals, so that the service canmaximise its training input. This trend to concurrent appointments is increasing and isgreatly welcomed. However, as so little recruitment of new members is taking place,achievement of our aspirations for a more diverse membership will take time.

The Legal and Publications Advisory Committee (LPAC)

The Committee operates under the direction of the Corporate Director and isresponsible for providing advice to professional staff on tribunal related matters.The Committee also retains responsibility for developing and maintaining VTSpublications, and providing advice to the VTS on various ODPM consultations relatingto local taxation matters.

Best Practice Committee (BPC)

The BPC meets under the direction of the Corporate Director and is responsible forreviewing the operational effectiveness of processes and procedures leading up to,and after, a valuation tribunal hearing to ensure consistent practices.

Working Committees

2004-2005


Human Resources

2004-2005


Staff numbers

On 1 April 2004 all employees of the English valuation tribunals were transferredunder TUPE regulations into the newly formed VTS. At the same time a new ChiefExecutive’s Office was established.

Employee numbers as at 31 March 2005 were:

Chief Executive’s Office 13 13.0Eastern AU 9 8.2East Midlands AU 9 7.9Home Counties North AU 9 9.0Home Counties South AU 10 9.3London North AU 14 14.0London South AU 9 9.0Northern AU 11 11.0North West AU 21 19.1Southern AU 4 4.0South West AU 6 5.4Thames Valley AU 5 3.9West Midlands AU 19 18.3Wessex AU 9 7.5Yorkshire AU 11 10.6Totals 159 150.2

Full time Office/Administrative Unit Staff in Post equivalent (FTE)

At that date there were three additional posts, one on secondment, one on acontract and one from an agency.

Staff complements are being reviewed in line with the VTS Strategy.

2004-2005


Appointments and leavers

Sixteen appointments were made over the period, including 13 new posts in the ChiefExecutive’s Office. One employee retired and four resigned. The retiree was replacedfrom internal resources, with no consequent vacancy. Three of the other posts werelapsed and one was covered by agency staff. The appointees were as follows:

Male 35.9Female 64.1Black or Black British 4.4White 92.5Mixed 0.6Asian or Asian British 0.6Chinese or other ethnic group 0.0Not declared 1.9Disabled 0.6

Category % of Workforce

Composition of workforce

The workforce is made up as follows:

Male 50.0Female 50.0Black or Black British 25.0White 68.7Mixed 0.0Asian or Asian British 6.3Chinese or other ethnic group 0.0Not declared 0.0Disabled 0.0

Category % of Appointees

Staff Profile

Employees have an average age of 45.3 years.

Average length of service is 16.6 years.

Employees’ terms and conditions are based on those of the National Joint Council forLocal Government.

Employees belong to 31 different pension funds within the Local Government PensionScheme (according to location) and 92% of the workforce is in the pension scheme.

Attendance

This is the first year for which sickness absence figures are available. The averagenumber of working days lost per full time equivalent employee was 11 days for theyear. Factoring out leave and Bank Holidays, 4.9% of available working time was lostthrough sickness absence.

Health and Safety

The VTS has a comprehensive risk assessment record. All health and safety policieshave been updated and implemented, including a no-smoking initiative.

General

The chief focus has been on setting up an HR service where none existed before, andon gathering together and rationalising the HR records. A new HR and trainingdatabase has been established to facilitate management reporting and generalstaffing administration.

The payroll has been contracted out to a new payroll provider (LogicaCMG) from1 April 2005 under a HM Treasury framework agreement.

A number of policies have been introduced or overhauled, for example on harassment.

There has been ongoing consultation with UNISON and a formal recognitionagreement is in hand.

An employee appraisal exercise has been carried out this year. A new system hasbeen devised for next year.

2004-2005


IT Strategy

In July 2004, following extensive consultation with our stakeholders, the Boardapproved the IT Strategy, setting out the roadmap for utilising technology within thebusiness for the next five years. In line with current government policy its aim is tofoster joined up Government and improve electronic communications with allstakeholders and parties. Consistent and appropriate upgrades and stated milestoneshave been built into the plan to enable greater control of IT expenditure.

Risk management

A major risk was identified within the Service, being the increasing cost of supportand imminent withdrawal of high-level support for some of the older Microsoftproducts still in use within the VTS. These include, but are not limited to, the desktopoperating systems, the back-end servers and the e-mail system. Therefore, a proposalto upgrade these items has been approved by the Board. The project started this yearand will be fully concluded within the second quarter of the next financial year.A large amount of planning has already been undertaken to ensure no disruption toany of the services or to any parties whilst this work is being undertaken.

NDR revaluation 2005

A new rating list was published on 1 April 2005. In order for the Service to processappeals against this list, changes were made to the centralised database, whichmonitors and stores all appeal details. This work was concluded towards the end ofthe current financial year and ensures that the software is capable of dealing withappeals against the 2005 list.

Change in our technology support contract

During the course of the last financial year, a new contract was implemented, whichcovers the technology support agreement. The existing contract with EDS expired andthe new contract was awarded to a consortium consisting of CapGemini, Fujitsu andBritish Telecom.

This led to a large number of procedural changes and the new contract has takensome time to settle down. It is expected that the new contract will improve thedelivery of IT services. Additionally, it is hoped that the overall costs of IT support infuture years will be reduced as a consequence of the new contract.

Information Technology (IT)

2004-2005


Training

2004-2005


The Training and Development Programme for 2004-2005 was produced in line withthe VTS business objectives. The Board approved a training strategy to support theseobjectives and consequently this strategy has informed the training programme forthe VTS.

Staff

A comprehensive range of training events were organised to address certainoperational priorities such as:

• supporting staff following the introduction of the new SAP accounting system andprocedures;

• supporting staff in the appraisal process; and

• developing senior management to enhance leadership and management skills.

VTS staff received a total of 551 days of training, as detailed below. This figureequates to an average of 3 days training per person.

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Tribunal Members

During 2004-05, significant progress was made in developing the members’ trainingand development programme, with an emphasis on partnership working. Thisapproach enabled the VTS to draw in experience from tribunal members and staff,who are selected through an open, transparent process. The training team wasrecruited with a commitment to attend a Train the Trainer course to perfect the skillsrequired to perform this training role.

The training team designed, developed and delivered a total of 12 training events.The detail of these events, including the total number of people invited and thenumber of people who attended, is shown below.

2004-2005


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Estates

2004-2005


When the VTS was set up on 1 April 2004, it inherited a portfolio of 25 propertiesfrom the ODPM. Two of these premises were already surplus to the businessrequirements of the VTS and have since been surrendered, as part of an ongoingrationalisation of the estate. Properties in a further three locations are due to be givenup during 2005-06 as part of this process.

Following establishment of the VTS as a NDPB, an additional property was acquired atthe Angel in London, which houses the Chief Executive and his management team.

The VTS is currently in the process of developing a longer-term estate strategy andhas recently published a consultation paper on the future of the business. Thisproposes a further reduction in the overall size of the estate, with the business beingoperated from four main regional offices, supported by locally based satellite officesacross the country.

In the past year, steps have been taken to secure leases in respect of several of the properties that were inherited from the ODPM and occupied by means ofinter-departmental agreements which did not provide the VTS with any securityof tenure.

An ongoing refurbishment and planned maintenance programme has also beenmaintained by the VTS in order to ensure that our offices are in a good condition andgenerally meet modern-day health and safety standards within the workplace.

A key achievement in this area is the implementation of works across the VTS estateto meet the requirements of the Disability Discrimination Act (DDA). In excess of£300,000 will have been spent in taking every reasonable step to ensure that ourpremises comply. We are scheduled to complete the final phase of this work by31 October 2005.

As part of the DDA requirements, the VTS has also arranged for Evac-Chairs to beinstalled at each of our premises.

We have recently introduced an Asbestos Management Plan and are in the process ofarranging for the removal, treatment or monitoring of any such materials that havebeen identified within our premises.

In May 2005 the consultation period for the strategy development plan ended andwe have entered an intensive period of analysis, study and discussion of theresponses. This will take us through to the end of July, after which the Board will betendering its advice to the Minister on those issues on which he sought a view fromthe VTS. On other aspects of the consultation, the Board will be announcing itsdecisions, having first agreed with our sponsoring department on the allocation offunding and the impact on our future Business and Corporate plans. We will thenbegin a period of further communication with staff and members on the detail ofimplementation to commence the five-year plan for rationalisation and development.It is unlikely that substantial changes to the structure will take place in 2005, and theremainder of this year will be spent on detailed implementation planning and localconsultation with regard to office siting and staffing issues.

The detailed implementation plan will need to look realistically at timescales to ensurethat adequate time is allowed to communicate fully on the changes, undertake anynecessary preparatory training, complete the internal recruiting for any new structureand introduce a revised financial schedule. These factors may militate against a rapidstructural change, and will also allow time for Ministers to take a view on theimplementation of change. Nevertheless, some office changes will occurindependently and the office rationalisation programme will continue withnegotiations over four new offices during the year, one of which we aim to completeand occupy. Potentially, the administrative rationalisation affects staff to a greaterdegree, so we will continue to give high priority to resolving staff issues and to makea substantial effort to carry staff with us as we go forward in the programme.

Members are less affected by office matters, but tribunal structures and memberissues also feature strongly in the strategic development plan.

Once the Minister has formed a view on any changes that are required in tribunalstructures and member issues, the Board will work closely with the sponsoringdepartment as they carry forward any necessary regulatory reforms. This will ensurethat appropriate preparations can be made for any new structures or operationalchanges that affect members.

If the proposals for Appeals Direct are accepted by the Government as the wayforward, and it is decided that it should be introduced for the council tax revaluationin 2007, this would require substantial involvement from the VTS throughout thenext 12 months. In addition, our computer systems will require additional revaluationsoftware packages to be written, tested and trialled during the year, so that we arewell ahead in our preparation for revaluation. As we move into 2006, the issuessurrounding public communication on council tax revaluation issues will gather pace.We will therefore need to have available a new range of leaflets and videos that

Forward look by Chief Executive

2004-2005


2004-2005


inform the public of their rights and how the appeal process works, should they wishto exercise their right to appeal. Such material could be made available, for example,at Citizens Advice Bureaux, and through the Valuation Office, local councils andsolicitors’ offices.

As we move further into 2006 and 2007 we will continue to build on the agreedfive-year plan for rationalisation. This will provide substantial challenges to effectsmooth transitions as office changes occur and new staff structures are implemented.At the same time we will commence work with the new Tribunal Service to examinefuture structures and common operating patterns across both administrative andjudicial disciplines.

All of this work contributes to an ongoing effort to promote our partnership working,modernise our structures and procedures, provide a greater focus on the customer,and prepare for greater affiliation within the wider tribunal world. Together itrepresents a substantial test to introduce a rolling programme of transformationwhilst maintaining the highest standards of operational effectiveness and publicservice. The Board and the Executive are confident however that the VTS andvaluation tribunals will rise to this challenge.

These financial statements have been prepared in line with a direction issued byHM Treasury in accordance with Section 7(2) of the Government Resources andAccounts Act 2000.

Statutory basis

The Valuation Tribunal Service is a non-departmental public body (NDPB). It wascreated under the Local Government Act 2003. The constitution of the VTS is set outin section 105 and Schedule 4 to this Act.

Principal activities:

• to provide, or arrange for the provision of, the services required for the operationof valuation tribunals in England, particularly accommodation, staff (includingclerks to tribunals), IT, equipment and training of members of valuation tribunalsand all staff of (including clerks to) tribunals;

• to give general advice about procedure relating to proceedings before tribunals;

• to provide the First Secretary of State with such information advice and assistanceas he may require;

• to carry out its functions with respect to valuation tribunals in the manner which itconsiders best calculated to secure their efficient and independent operation; and

• in relation to its functions with respect to the valuation tribunals, to consult thetribunals concerned about the carrying out of its functions.

VTS aims

To secure the efficient and independent operation of the valuation tribunals inEngland and to improve customer service through the spread of best practice.

The Secretary of State has defined the overall aim for the VTS as follows:

To provide staff, accommodation and other support (including general advice aboutprocedure in relation to proceedings before tribunals) to valuation tribunals in England.

Going concern

The balance sheet at 31 March 2005 shows net liabilities of £6,605,000. This reflectsthe inclusion of liabilities falling due in future years which, to the extent that they arenot to be met from the VTS’ other sources of income, may only be met by future

Foreword to the financial statements

2004-2005


2004-2005


grants or grants-in-aid from the VTS’ sponsoring department, the Office of theDeputy Prime Minister. This is because, under the normal conventions applying toparliamentary control over income and expenditure, such grants may not be issued inadvance of need.

The grant-in-aid for 2005-06, takes into account the amounts required to meet theVTS’ liabilities falling due in that year, this has already been included in theDepartment’s estimates for that year, (which have been approved by Parliament), andthere is no reason to believe that the Department’s future sponsorship and futureparliamentary approval will not be forthcoming. It has accordingly been consideredappropriate to adopt a going concern basis for the preparation of these financialstatements.

Financial Reporting Standard 17 ‘Retirement benefits’

Under HM Treasury guidance, the VTS has implemented Financial Reporting Standard17 (FRS17). The VTS prepares its accounts in accordance with the HM TreasuryResource Accounting Manual as it applies to Non-Departmental Public Bodies.This assumes a net discount rate of 3.5% p.a. and assumes inflation to be 2.5% p.a.Further, under FRS17, the additional costs associated with paying benefits early,or granting additional service, where staff members retire on unreduced pension onredundancy or efficiency grounds have been recognised in full in the Income andExpenditure Statement in the year the requirement is granted.

These financial statements have been prepared in accordance with a direction givenby HM Treasury in accordance with section 7(2) of the Government Resources andAccounts Act 2000.

During the 12 months, the VTS was funded by the Office of Deputy Prime Minister(ODPM). The funding received amounted to £10,950,000 (Revenue £10,610,000 andCapital £340,000); in addition other forms of income totalled £200,000.

Net operating costs for the financial year as at 31 March 2005 were £10,793,000.

Fixed Assets

The total net book value of the VTS’ fixed assets as at 31 March 2005 was £327,000.The movements in fixed assets for the year are set out in notes 6 and 7 to the financialstatements. There were no costs incurred on Research and Development during the12 months ended 31 March 2005.

Pension Liabilities

For the purposes of Financial Reporting Standard 17, pension scheme liabilities of£6,977,000 have been recognised in the balance sheet. An actuarial gain of£737,000 is shown in the Statement of Recognised Gains and Losses. In addition£924,000 is recognised in the Income and Expenditure account for Net RevenueAccount Cost.

The above pension entries in the Report and Accounts represent non-cash items.

Payment to suppliers

The VTS is committed to the prompt payment of bills for goods and services received.Payments are normally made as specified in contracts. If there is no contractualprovision or understanding, they should be paid within 30 days of the receipt ofgoods and services, or presentation of a valid invoice or similar demand, whichever islater. A review of all payments made during the twelve-month period, conducted tomeasure how promptly the VTS pays its bills, found that 90.24% of bills were paidwithin this time-scale.

The Late Payment of Commercial Debts (Interest) Act 1998 (which came into effectfrom 1 November 1998) and the Late Payment of Commercial Debts Regulations

Financial Summary

2004-2005


2004-2005


2002 (which came into force on 7 August 2002) provide that all business and publicsector bodies have the following entitlements:

• to claim interest for late payments;

• to claim reasonable debt recovery costs, unless the supplier has actedunreasonably;

• to challenge contractual terms that do not provide a substantial remedy againstlate payment; and

• to challenge, as ‘representative bodies’, contractual terms that are grossly unfairon behalf of small and medium sized enterprises.

Events since the end of the financial year

There are no events that have happened since the end of the financial year tomaterially affect the contents of these financial statements.

Employee Involvement

During 2004-05 the VTS employed on average 150.2 full-time equivalent staff. TheVTS maintains regular communications and contact with managers and staff throughindividual and group meetings, team briefs, the Intranet and through the VTS’newsletter. The VTS consults on issues affecting staff with representatives from theTrade Union, UNISON.

Auditors

The accounts of the VTS are audited by the Comptroller and Auditor General underthe Government Resources and Accounts Act 2000. An internal audit service for theVTS is provided by Deloitte and Touche under the terms of a service level agreement.

Under the Local Government Act 2003, the Board and the Chief Executive of theValuation Tribunal Service for England are required to prepare a statement ofaccounts for each financial year, in the form and on the basis determined by theFirst Secretary of State, with the consent of HM Treasury.

The Accounting Officer for the ODPM has designated me as the VTS’ AccountingOfficer for the accounting period 1 April 2004 to 31 March 2005.

I have responsibility for the propriety and regularity of the public finances and for thekeeping of proper records, as set out in the Non-Departmental Public Bodies’Accounting Officers’ Memorandum, issued by HM Treasury and published inGovernment Accounting by the Stationery Office.

The annual accounts are prepared on an accruals basis and must show a true and fairview of the VTS’ state of affairs at the year end, and of its income and expenditureand cash flows for the financial year.

In preparing these accounts, I am required to:

• observe the accounts direction issued by the First Secretary of State, including therelevant accounting and disclosure requirements, and apply suitable accountingpolicies on a consistent basis;

• make judgements and estimates on a reasonable basis;

• state whether or not applicable accounting standards have been followed anddisclose and explain any material departures in the financial statements; and

• prepare annual accounts on a going concern basis, unless it is inappropriate topresume that the VTS will continue in operation.

The VTS Board will continue to employ Deloitte and Touche as the internal auditorsfor the VTS for the 2005-06 accounting period, operating to Government InternalAudit Standards (GIAS). The work of the internal auditors has been carried out inaccordance with agreed plans.

The development and maintenance of the VTS internal control framework will beinformed by work undertaken by our internal auditors and the content of ourexternal auditors’ management letter.

Signed on behalf of the Board by

Laurence Barnes, Accounting Officer and Chief Executive, Valuation Tribunal Service 20 June 2005

Statement of the Board’s and ChiefExecutive’s Accounting Responsibilities

2004-2005


Statement on internal control

2004-2005


1 Scope of responsibility

As Accounting Officer, I have responsibility for maintaining a sound system of internalcontrol that supports the achievement of VTS policies, aims and objectives, set by thedepartment’s Ministers, whilst safeguarding the public funds and departmental assetsfor which I am personally responsible, in accordance with the responsibilities assignedto me in Government Accounting.

2 The purpose of the system of internal control

The system of internal control is designed to manage risk to a reasonable level ratherthan eliminate all risk of failure to achieve polices, aims and objectives. It cantherefore only provide reasonable and not absolute assurance effectiveness.

The system of internal control is based on ongoing processes designed to identify andprioritise the risks to the achievement of VTS policies, aims and objectives, to evaluatethe likelihood of those risks occurring and their impact should they occur and tomanage them efficiently, effectively and economically. The system of internal controlhas been in place in the VTS for the year ended 31 March 2005, and accords withHM Treasury guidance.

3 Capacity to handle risk

Whilst every member of staff within the VTS has responsibility to ensure that the VTS’exposure to risk is minimised, overall leadership of the VTS’ risk management processrests with members of the Executive Management Team (EMT). They are responsiblefor promoting and embedding a risk management culture within the VTS, whichincludes setting the risk management framework within which the VTS operates.

As Accounting Officer, I act as the Risk Champion for the VTS. The Corporate Directorhas leadership responsibility for ensuring that appropriate mechanisms are in place toidentify, monitor and control risk and for advising the EMT on the actions needed inorder to comply with our corporate governance requirements.

An important part of our risk management framework is to ensure that staff have the appropriate skills to discharge their risk management responsibilities. During theyear, training on risk management has been targeted at our Senior ManagementTeam (SMT).

4 The risk control framework

The VTS has developed a system for managing risks, which complies with theprinciples set out in the “Orange Book”, (Management of Risks – Principles andConcepts) published by HM Treasury in October 2004.

The key standards of the VTS’ risk management strategy are to:

• ensure that there is ownership and awareness of risk management throughoutthe organisation;

• ensure that a systematic process is in place for identifying, monitoring andcontrolling the key risks faced by the VTS in delivering its corporate agenda.This includes maintaining a structured system of risk registers, which log risks atcorporate, regional and project level;

• manage risk in accordance with best practice;

• provide risk management training;

• promote and communicate risk awareness to staff; and

• operate a system of stewardship reporting whereby, at the end of each financialyear, responsible managers formally report to the Accounting Officer on theeffectiveness of the system of internal control and the action that they have takento manage risk within their area of responsibility.

During the year the main priorities have been to formulate our risk strategy, to raiseawareness of risk management and to implement risk registers.

Review of effectiveness

As Accounting Officer, I have responsibility for reviewing the effectiveness of thesystem of internal control. My review is informed by the work of the internal auditorsand the senior managers within the VTS who have responsibility for theimplementation of our internal control framework, and comments made by theexternal auditors in their management letter and other reports.

I have been advised of the effectiveness of the system of internal control by ourinternal auditors. Plans to address weaknesses and ensure continuous improvementare in place. The processes that I have implemented to maintain an effective systemof internal control include:

• the EMT meets on a regular basis and is responsible for implementing the strategicdirection of the VTS, ensuring that appropriate corporate governance proceduresare in place, establishing the risk priorities for the organisation and overseeing theeffective management of risk within the VTS;

2004-2005


2004-2005


• the SMT, which is comprised of the Heads of Administration, which meets at leasteight times a year to consider the procedures, operational and strategic directionof the VTS and is responsible for ensuring that corporate risks are identified asearly as possible, are properly managed and that the importance of riskmanagement receives a high profile within regional units;

• an Audit Committee which meets at least four times a year and is responsible forensuring, as far as possible, that appropriate mechanisms are in place within theVTS for the assessment and management of risk and for advising the AccountingOfficer on the effectiveness of the system of internal control within theorganisation, prior to his signing off the Statement on Internal Control;

• regular reports by internal audit, to standards defined in the Government InternalAudit Standards, which includes the internal auditors’ independent opinion on theadequacy and effectiveness of the VTS’ system of internal control together withrecommendations for improvement;

• periodic reports on internal control to the VTS Board from the Chairman of theAudit Committee;

• the establishment of an appropriate delegated budget management framework;

• the establishment of a system of end-of-year stewardship reporting by seniormanagers;

• the development of a risk management strategy and risk management frameworkwhich comply with best practice;

• the establishment of a corporate risk register, which is supported by regional riskregisters, reviewed by the SMT on a periodic basis;

• the adoption of formal project management arrangements for all key projects,which includes the development and maintenance of project risk registers; and

• regular reports to the VTS Board on progress against the VTS’ key targets,objectives and projects.

There are no control problems of significance to report.

Laurence BarnesAccounting Officer, Valuation Tribunal Service 20 June 2005

Report by Internal Auditors

2004-2005


Introduction

We have now completed our Internal Audit Programme covering the financial period,1 April 2004 – 31 March 2005, as approved by the VTS Audit Committee. Thepurpose of this report is to present the results of the Internal Audit work carried outby Deloitte and Touche during 2004-05.

As defined in the GIAS, the role of internal audit is to provide an independent andobjective opinion to the Accounting Officer on risk management, control andgovernance. The opinion given by internal audit is a key element of the framework ofassurance, which the Accounting Officer needs to inform the completion of theannual Statement on Internal Control (SIC). The opinion can only be reasonable in thesense that no opinion or assurance can ever be absolute and is by definition anextrapolation of the evidence available. The Internal Audit opinion does not supersedethe Accounting Officer’s personal responsibility for risk, control and governance.

The Statement of Assurance

We are required to give an opinion on risk management, control and governance.In assessing the level of assurance to be given, we have taken into account:

• All internal audits undertaken between 1 April 2004 and 31 March 2005;

• The action taken in response to our audit recommendations;

• Whether fundamental or significant recommendations have been accepted bymanagement, and the consequent risks;

• The effects of any material changes in the VTS’ objectives or systems; and

• Whether or not any limitations have been placed on the scope of internal audit.

Based on the work completed between 1 April 2004 and 31 March 2005, carried outin accordance with the scopes agreed by the Audit Committee, taking into accountthe proposed action by management to rectify the control weaknesses identified inour detailed reports, in our opinion VTS has an adequate and effective system ofinternal controls which provides reasonable assurance regarding the effective andefficient achievement of VTS’ objectives.

Sources of Assurance

To provide the required assurance we undertook an agreed programme of work withthe following objectives:

2004-2005


• to appraise the soundness, adequacy and application of the whole internal controlsystem;

• to ascertain the extent to which the system of internal control ensures compliancewith established policies and procedures;

• to ascertain the extent to which the assets and interests entrusted to or funded bythe VTS are properly controlled and safeguarded from losses arising from fraud,irregularity or corruption;

• to ascertain that accounting and other information is reliable as a basis forproducing accounts, and financial, statistical and other returns;

• to ascertain the integrity and reliability of financial and other information providedto management, including that used in decision making; and

• to ascertain that systems of control are laid down and operate to promote themost economic, efficient and effective use of resources.

We have provided in Section 1 a statement of the level of assurance achieved foreach system audited. Full or substantial assurance was achieved for 89% of all of thesystems audited.

Assurance Statement

The Internal Audit operational plan for 2004-05 covered 10 audits as agreed by theAudit Committee. A statement of the level of assurance achieved for each area ofaudit is shown below.

Deloitte and Touche, Chartered Accountants and Registered Auditors

High Risk Management – Phase 1 SubstantialHigh Payments to Suppliers/T&S Claims SubstantialHigh Payroll SubstantialHigh Purchasing and Payments SubstantialHigh Nominal Ledger FullHigh Information Technology – Wide Area Network SubstantialHigh Staff Development and Appraisals LimitedHigh Performance Monitoring SubstantialHigh Corporate Governance SubstantialMedium Regional Office Compliance N/A

Significance Assurance Level Level Audit Area 2004-05

I certify that I have audited the financial statements on pages 42 to 47 under theLocal Government Act 2003. These financial statements have been prepared underthe historical cost convention as modified by the revaluation of certain fixed assetsand the accounting policies set out on pages 48 to 51.

Respective Responsibilities of the VTS, the Chief Executive and Auditor:

As described on page 34, the Chief Executive is responsible for the preparation of thefinancial statements in accordance with the Local Government Act 2003 and Treasurydirections made thereunder and for ensuring the regularity of financial transactions.The Chief Executive is also responsible for the preparation of the Foreword andcontents of the Annual Report. My responsibilities, as independent auditor, areestablished by statute and I have regard to the standards and guidance issued by theAuditing Practices Board and the ethical guidance applicable to the auditing profession.

I report my opinion as to whether the financial statements give a true and fair viewand are properly prepared in accordance with the Government Resources andAccounts Act 2000 and Treasury directions made thereunder, and whether in allmaterial respects the expenditure and income have been applied to the purposesintended by Parliament and the financial transactions conform to the authoritieswhich govern them. I also report if, in my opinion, the Foreword is not consistentwith the financial statements, if the VTS has not kept proper accounting records, or ifI have not received all the information and explanations I require for my audit.

I read the other information contained in the Annual Report and consider whether itis consistent with the audited financial statements. I consider the implications for mycertificate if I become aware of any apparent misstatements or materialinconsistencies with the financial statements.

I review whether the statement on pages 35 to 37 reflects the VTS’ compliance withTreasury’s guidance on the Statement on Internal Control. I report if it does not meetthe requirements specified by Treasury, or if the statement is misleading orinconsistent with other information that I am aware of from my audit of the financialstatements. I am not required to consider, nor have I considered whether theAccounting Officer’s Statement on Internal Control covers all risks and controls. I amalso not required to form an opinion on the effectiveness of the VTS’ corporategovernance procedures or its risk and control procedures.

Basis of Audit Opinion

I conducted my audit in accordance with United Kingdom Auditing Standards issuedby the Auditing Practices Board. An audit includes examination, on a test basis, ofevidence relevant to the amounts, disclosures and regularity of financial transactions

2004-2005


Certificate and Report of the Comptroller andAuditor General to the House of Commons

2004-2005


included in the financial statements. It also includes an assessment of the significantestimates and judgements made by the VTS and Chief Executive in the preparation ofthe financial statements, and of whether the accounting policies are appropriate tothe VTS’ circumstances, consistently applied and adequately disclosed.

I planned and performed my audit so as to obtain all the information andexplanations which I considered necessary in order to provide me with sufficientevidence to give reasonable assurance that the financial statements are free frommaterial misstatements, whether caused by error or by fraud or other irregularity andthat, in all material respects, the expenditure and income have been applied to thepurposes intended by Parliament and the financial transactions conform to theauthorities which govern the VTS. In forming my opinion I have also evaluated theoverall adequacy of the presentation of information in the financial statements.

Opinion

In my opinion:

The Financial Statements give a true and fair view of the state of affairs of theValuation Tribunal Service at 31 March 2005 and of the surplus, total recognisedgains and losses and cash flows for the year then ended and have been properlyprepared in accordance with the Local Government Act 2003 and directions madethereunder by the First Secretary of State, and in all material respects the expenditureand income have been applied to the purposes intended by Parliament and thefinancial transactions conform to the authorities which govern them.

I have no observations to make on these financial statements.

John Bourn, Comptroller and Auditor General

National Audit Office157-197 Buckingham Palace RoadVictoriaLondon SW1W 9SP

22 June 2005

Income and Expenditure Account for thePeriod to 31 March 2005

2004-2005


1 VTS rent and related costs were paid by the ODPM in March 04 (2003-04 financial year), these costs were related tothe VTS 2004-05 financial year. The VTS has recognised these costs in its Income and Expenditure Statement asnotional costs.

2 The Net revenue account cost comprise of an operating charge, which represents the employer's share of the cost ofLocal Government Pension Scheme (LGPS) benefits accruing over the financial year plus the cost of granting earlyretirement. In addition interest being the difference between the interest accrued on the pension scheme liabilitiesand the expected investment return on the pension scheme assets.

Period ended 31 March 2005

Note £’000

IncomeGrant-in-aid receivable from the Office of the Deputy Prime Minister for revenue purposes 10,610Transfer from Government Capital Reserve 15 12Other Income 2 200

Total Income 10,822

ExpenditureAdministration Costs– Staff costs 3e 5,273– Other costs 4 5,508– Depreciation 5 12

Total Expenditure (10,793)

Surplus/(Deficit) before interest 29

Interest received 2Interest paid/charges (2)Cost of capital 8 (10)Notional expenditure1 (202)

Surplus/(Deficit) after interest (183)

Reversal of cost of capital 8 10Reversal of notional expenditure1 202Net revenue account cost (pension)2 13a (924)

Surplus/(Deficit) for period 14 (895)

The notes on pages 48 to 74 form part of these accounts.All of the results are derived from continuing operations.

Statement of Total Recognised Gains andLosses as at 31 March 2005

The entries relating to the introduction of FRS17 is explained in the foreword onpage 31. This statement analyses the difference between the long-term assumptionsmade by the actuary and the calculations to be made under FRS 17 as at31 March 2005.

There are four components to the Increase/(Decrease) in Irrecoverable Surplus fromMembership Fall and Other Factors as described below:

1 Actual return less expected return on pensionscheme assets

In the element charged to financing costs in the Income and Expenditure Account, anassumption is made at the beginning of the period about the expected investmentreturns to be achieved on the Scheme’s assets in the accounting period. In practice,the actual investment returns will differ from those assumed. The difference betweenthe expected returns and those actually achieved are reflected in this accountingstatement.

2 Experience gains and losses arising on thescheme liabilities

As a roll forward approach has been used to calculate the liabilities, there is a smallexperience loss due to rounding errors within the calculations. A more significantexperience gain/loss could potentially occur following a formal valuation. This itemarises because the actual movement in the liabilities may not be in line with theassumed experience. For example, there may have been different number of deaths

2004-2005



Note £’000

Surplus/(Deficit) for period (895)

Unrealised Surplus/(Deficit) on Revaluation 16 0Increase/(Decrease) in Irrecoverable Surplus from Membership Fall and Other Factors 13b/16 737

Total Recognised Gains and Losses for the period (158)

or leavers, or salaries may not have grown as expected which leads to a differentperiod end assessment of liability from that expected. These differences arereflected above.

3 Changes in financial assumptions underlying thescheme liabilities

These actuarial assumptions are partly financial and partly demographic. Althoughunder FRS17 the financial assumptions are market-related, the VTS prepares itsaccounts in accordance with HM Treasury Resource Accounting Manual as it appliesto Non-Departmental Public Bodies. The discount rate employed for both the2004-05 and 2005-06 financial years is thus a net discount rate of 3.5% p.a., withinflation assumed to be 2.5% p.a. This means that the financial assumptions haveremained constant over the accounting period. The disclosures as at 31 March 2004and 31 March 2005 are both based on the demographic assumptions adopted forthe funding valuations as at 31 March 2004. As a result, there is no difference ineither the financial or demographic assumptions that requires to be accounted forover 2004-05.

4 Increase/(Decrease) in Irrecoverable Surplus fromMembership Fall and Other Factors

The surplus (deficit) in a defined benefit scheme is the excess (shortfall) of the valueof assets in the scheme above (below) the value of the pension liabilities. The amountof any surplus that an employer should recognise an asset should be limited to thesurplus from which it can benefit, either through reduced contributions in the futureor through refunds from the scheme. The maximum surplus that can be recoveredthrough reduced future contributions is assessed as the employer cost of all futureservice for current employees (or the value of the liability expected to arise fromfuture service in the scheme by current and future scheme members less the value ofemployee contributions over the same period). No growth in the number of activescheme members should be assumed but a declining membership should be reflectedif appropriate. The amount to be recovered from any refund to the employer reflectsonly refunds that have been agreed at the balance sheet date. There is no legalmechanism by which refunds can be made to employers from the LGPS.

There is no surplus for FRS17 purposes in the LGPS attributable to the VTS’participation in the scheme at either 31 March 2004 or 31 March 2005. Thus, the

2004-2005


2004-2005


reference to a reduction in irrecoverable surplus does not apply to the currentfinancial year, in other words there is no effect of any change in irrecoverable surplusover the year to 31 March 2005. This item would only be an issue if there were asurplus and, due to a fall in the active members, the value of the future service fell,such that the employer cost of all future service for employees was less than theamount of the surplus. In this case, the employer would not be able to disclose thefull amount of the surplus in its balance sheet as an asset.

Balance Sheet as at 31 March 2005

2004-2005



Note £’000

Fixed Assets– Intangible Assets 6 7– Tangible Assets 7 320

327

Current Assets– Debtors 9 561– Cash at Bank and in Hand 20 206

767

Creditors– Amounts Falling due within one year 10 536

Net Current Assets 231

Total Assets less Current Liabilities 558

Deferred Income 11 56Provisions for Liabilities and Charges 12 130

Net Assets employed excluding pension liabilities 372

Provisions for Pension Liabilities 13 6,977

Total Net Liabilities (6,605)

Represented byCapital and Reserves– General Reserve 14 (880)– Government Capital Reserve 15 328– Revaluation Reserve 16 737– Pension Fund Reserve 17 (6,790)

(6,605)

The notes on pages 48 to 74 form part of these accounts

Laurence Barnes, Chief Executive, Valuation Tribunal Service 20 June 2005

Cash Flow Statement for the period to31 March 2005

2004-2005



Note £’000

Net Cash Inflow/(Output) from Operating Activities 19 203

Capital ExpenditurePurchase of Fixed Assets 6/7 (340)Proceeds of Sale of Fixed Assets 0

Net Cash Outflow from Capital Expenditure (340)

FinancingTransfer of Deferred Government Grant 328Staff loans from ODPM (Pre 1 April 2004) 15

Total financing 343

Net Cash Inflow/(Outflow) 20 206

The notes on pages 48 to 74 form part of these accounts.

1 Statement of accounting policies

1.1 The financial statements have been prepared in accordance with the 2004-05Resource Accounting Manual (RAM) issued by HM Treasury. The accountingpolicies contained in the RAM follow UK Generally Accepted Accounting Practicefor companies (UK GAAP) to the extent that it is meaningful and appropriate tothe public sector. Where the RAM permits a choice of accounting policy, theaccounting policy which has been judged to be most appropriate to theparticular circumstances of the VTS, for the purpose of giving a true and fairview, has been selected. The VTS’ accounting policies have been appliedconsistently in dealing with items considered material in relation to the accounts.

1.2 The accounts follow the accruals concept of accounting and have been preparedunder the historical cost convention modified to account for the revaluation offixed assets.

1.3 Basis of Accounting

These accounts are prepared on a going concern basis.

1.4 Fixed Assets and Depreciation

i Capitalisation threshold

Assets are capitalised where they have an expected useful life of more thanone year and where the original cost of the item exceeds £1,000 includingVAT. Individual items valued at less than this threshold are capitalised if theyconstitute integral parts of a composite asset that is in total valued at morethan the capitalisation value.

ii Land and buildings

The VTS does not hold any financial interest in land or buildings. The VTSoccupies various premises rented or leased from a number of landlords.

iii Revaluation

The VTS re-values its assets in March of each year using appropriate indicesprovided by the Office for National Statistics.

iv Depreciation

The straight line method of depreciation is used, i.e. depreciation is providedat rates calculated to write off the valuation of fixed assets less theestimated residual value by equal annual instalments over their estimateduseful lives. The VTS reviews the asset lives annually. The asset lives currentlyapplied to the VTS’ main category of assets are as follows:

2004-2005


Notes to the Accounts

2004-2005


• Computers 3 years;

• Furniture and Office Equipment 5 years.

Depreciation is in the month of acquisition and is charged in the month ofasset disposal.

v Intangible assets and amortisation

Software licences are capitalised as Intangible Assets and shown in note 6.These licences are amortised by equal annual instalments over the length ofthe licence.

vi Assets under construction

These represent the accumulated expenditure incurred in constructing assetsthat enhance the VTS’ infrastructure. Assets under construction are notdepreciated until brought into use.

vii Donated assets

Donated tangible fixed assets are capitalised at valuation, which representscurrent cost on receipt. This valuation gain is credited to the donated assetreserve. The valuation of these assets is then reviewed annually.

Donated assets are subject to revaluation, depreciation and impairmentreviews in the same way as other assets.

viii Group assets

The core VTS capitalisation threshold is £1,000; some assets as categorisedbelow can be grouped where the £1,000 threshold is not reached.

The VTS allows grouping of items as follows:

• networked computer infrastructure;

• strategic IT equipment; and

• furniture.

Where the VTS replaces key components of grouped assets, thereplacement is depreciated over the remaining useful life of the asset.Where regular maintenance is performed, this is expensed during the year.

1.5 Stocks

The VTS aims to hold stock at a level that is commensurate with immediatebusiness needs. Therefore stock holdings are minimal and have no significantrealisable value outside the VTS. It has been given a nil value in the VTS’accounts for the year ended 31 March 2005.

1.6 Government grants

Grant-in-aid is receivable by the Board to enable the Board to discharge itsstatutory function. Grant of a revenue nature is credited to income in the year towhich it relates. Grant utilised for the purchase of tangible fixed assets is creditedto a Government Capital Reserve and released to the Income and Expenditureaccount over the expected useful lives of the relevant assets. On the disposal of afixed asset paid for wholly or in part by government grant, an amount equal tothe profit or loss on disposal, or such proportion thereof as is appropriate, istransferred from the grant reserve to the Income and Expenditure account.

1.7 Capital charge

A charge, reflecting the cost of capital utilised by the VTS, is included inoperating costs. The charge is calculated at the government’s standard rate of3.5% in real terms on all assets less liabilities, except for donated assets and cashbalances with the Paymaster General, which do not attract a charge.

1.8 Pensions

The Local Government Pension Scheme (LGPS) is a defined benefit statutoryscheme, administered in accordance with the Local Government Pension SchemeRegulations 1997, as amended. It is contracted out of the State Pension.

All VTS staff who have consented are members of the LGPS. The LGPS is afunded multi-employer contributory defined benefit scheme. Every three yearsindependent actuaries carry out a valuation of the pension fund and set the rateat which the VTS must contribute to fully fund the payment of Scheme benefitsfor the fund’s membership.

The latest formal valuation of the LGPS schemes in which there are VTS staffmembers was carried out as at 31 March 2004. For 2004-05, employer’scontributions of £478,179 were paid to the LGPS, at a rate ranging from 3.5%to 32.1% of pensionable pay. During 2004-05 the VTS also made relatedpension payments for former VTS employees totalling £88,822.

The VTS bears the full cost of the LGPS benefits for employees who retire early orwith an enhanced pension. The total cost of granting early retirements orenhancements is charged to the Income and Expenditure account in the year theretirements are granted.

1.9 Operating Leases

Rentals payable under operating leases are charged to the Income andExpenditure account in the year to which the payments relate.

2004-2005


2004-2005


1.10 Finance Leases

Where substantially all risks and rewards of ownership of a leased asset areborne by the VTS, the asset is recorded as a fixed asset and a debt is recorded tothe lessor of the minimum lease payments discounted by the interest rate implicitin the lease. The interest element of the finance lease payment is charged tooperating costs over the period of the lease at a constant rate in relation to thebalance outstanding.

1.11 Provisions

The VTS provides for legal or constructive obligations which are of uncertaintiming or amount at the Balance Sheet date on the basis of the best estimate ofthe expenditure required to settle the obligation. Where the effect of the timevalue of money is significant, the estimated risk-adjusted cash flows arediscounted using the Treasury discount rate of 3.5% (2004-05, 6%) inreal terms.

Dilapidation provisions are made for leases on buildings which the VTS stilloccupies. Where buildings have been vacated, these have been included inCreditors.

1.12 VAT

Irrecoverable VAT is charged to the relevant expenditure category or included inthe capitalised purchase cost of fixed assets.

1.13 Taxation

The VTS is exempt from income and corporation tax under the Income andCorporation Taxes Act 1988.

2004-2005


3 Board and Staff Costs

3a Board members’ emoluments and expenses

The Board consists of up to seven members, including the Chairman. Members areappointed by the First Secretary of State for terms ranging from 12 to 36 months.Non-Executive Board members are eligible to receive an annual fee, which is notpensionable.

3b Chairman’s and Chief Executive’s emoluments

The Chairman was appointed by the First Secretary of State on 1 April 2004. The Chairman’s total emolument consists of a salary of £37,000. The Chairmandoes not participate in the Local Government Pension Scheme.

The Chief Executive was appointed on 1 April 2004. The Chief Executive is amember of the Local Government Pensions Scheme. The amount of the ChiefExecutive’s bonus is decided by the Remuneration Committee, who reviewperformance against agreed targets. The bonus is also approved by the FirstSecretary of State.

The contract for the Chairman ends on 31 March 2006 and that for the ChiefExecutive on 31 March 2007.


Note £’000

Rent receivable 198Publications and copies of documents 2Receipts from sale of fixed assets 0

Total Other Income 200

Income generated complies with HM Treasury Fees and Charges direction.

2 Other Income

The salary and pension entitlements of the Chairman and Chief Executive wereas follows:

2004-2005


3c Fees and emoluments for non-executive members of the VTS for theperiod 1 April 04 to 31 March 05:


Note £’000

The emoluments of the Chairman, Anne Galbraith for the period 1 April 04 to31 March 05:– Basic salary 37

Total emoluments 37

The emoluments of the Chief Executive, Laurence Barnes for the period 1 April 04to 31 March 05:– Basic salary 75– London weighting 3– Performance related pay 8– Employer pension contribution 9

Total emoluments 95

– Pension increase (net of inflation) 1– Total accrued pension at 31 March 2005 14


Name Note £’000

Anne Galbraith 37Paul Wood 10Maurice Crosswell 6Edward Gunby 6Peter Lawton1 4Irene Robinson 6Michael Tildesley2 0Lionel Campuzano3 1

Total 70

1 appointed 13 July 2004. 2 fee declined. 3 resigned 4 July 2004.

2004-2005


3d Executive Directors

The salary and pension entitlements of the most senior members of theValuation Tribunal Service were as follows:


Note £’000

The emoluments of the Resource Director, Gilbert George:– Basic salary 52– London weighting 3– Employer pension contribution 6

Total emoluments 61

– Pension Increase (net of inflation) 1– Total accrued pension at 31 March 2005 7

The emoluments of the Corporate Director, Antonio Masella:– Basic salary 52– London weighting 3– Employer pension contribution 5

Total emoluments 60

– Pension Increase (net of inflation) 1– Total accrued pension at 31 March 2005 172

2004-2005


3e Staff Costs


Note £’000

The aggregate payroll costs for the VTS were as follows:Salaries 4,174Social security costs 351Pension costs 567

5,092

Other staff costsRedundancies and payment in lieu of notice 56Fringe benefits 2Agency/Seconded Staff costs 104Other non staff fees 19

181

Total staff costs 5,273

The average number of staff employed during the period to 31 March, including the Chief Executive was: 159

2004-2005


Staff Numbers and Location

Chief Executive Office 3 9 2 1 15Eastern 1 8 0 0 9East Midlands 1 8 0 0 9Home Counties North 1 8 0 0 9Home Counties South 1 9 0 0 10London North 1 13 0 0 14London South 1 8 0 0 9Northern 1 10 0 0 11North West 1 20 0 0 21Southern 1 3 0 1 5South West 1 5 0 0 6Thames Valley 1 4 0 0 5Wessex 1 8 0 0 9West Midlands 1 18 0 0 19Yorkshire 1 10 0 0 11

Total 17 141 2 2 162

Payroll staffnumber Inward Agency/ Year ended

Senior (excludes seconded temporary 31 March 2005Management senior staff staff total staff

Office/Admin Unit staff number management) number number number

The number of staff, including the Chief Executive, whose annual rate of remunerationas at 31 March 2005 exceeded £40,000 excluding pension contributions andperformance related pay but including any benefits in kind and London Weighting was:

Remuneration Band Number

– £40,000 to £44,999 24– £45,000 to £49,999 1– £50,000 to £54,999 0– £55,000 to £59,999 2– £60,000 to £64,999 0– £65,000 to £69,999 0– £70,000 to £74,999 0– £75,000 to £79,999 1– £80,000 to £84,999 0

Senior Managers

2004-2005


The salary, pension entitlements and the value of any taxable benefits in kind of the senior managementteam of the VTS were as follows:

Name Salary, Benefits Real Total CETV at CETV at Real including in increase accrued 31.3.04 31.3.05 increase London kind in pension pension (nearest (nearest in CETV Weighting (rounded & related at age 60 £k) £k) after and to lump at 31.3.05 adjustment performance nearest sum & related for inflation pay £k) at age 60 lump sum and changes (£k) (£k) (£k) in market

investment factors(nearest £k)

i ii iii iv v vi vii

Laurence Barnes 85 0 4 4 0 14 9

Gilbert George 55 0 3 3 0 7 4

Antonio Masella 55 0 15 60 123 172 38

Kate Adams 42 1 7 64 242 283 25

Jon Bestow Consent to disclose withheld

Richard Bowater Consent to disclose withheld

Malcolm Buckland 43 1 1 57 180 198 3

Murray Campbell 42 1 2 50 165 185 9

Ian Coates 43 1 4 83 303 331 12

Larry Goddard 44 1 4 68 246 275 11

Brian Hannon 42 1 3 44 145 164 8

John Hewitson 43 1 1 51 152 168 4

Mavis Latham Consent to disclose withheld

David Phillips 43 1 1 71 270 294 5

Lesley Rutherford Consent to disclose withheld

Andrew Shipsides 43 1 1 36 105 118 4

Vincent Turner 43 1 3 49 153 172 8

Columns (v) and (vi) of the table show the member’s cash equivalent transfer value(CETV) accrued at the beginning and the end of the reporting period. Column (vii)reflects the increase in CETV effectively funded by the employer. It takes account ofthe increase in accrued pension due to inflation, contributions paid by the employee(including the value of any benefits transferred from another pension scheme or

2004-2005


arrangement) and uses common market valuation factors for the start and end ofthe period.

A CETV is the actuarially assessed capitalised value of the pension scheme benefitsaccrued by a member at a particular point in time. The benefits valued are the staffmember’s accrued benefits and any contingent spouse’s pension payable from thescheme. A CETV is a payment made by a pension scheme or arrangement to securepension benefits in another pension scheme or arrangement when the staff memberleaves a scheme and chooses to transfer the benefits accrued in their former scheme.The pension figures shown relate to the benefits that the individual has accrued as aconsequence of their total membership of the pension scheme, not just their servicein a senior capacity to which disclosure applies. The CETV figures, and from 2004-05the other pension details, include the value of any pension benefit in another schemeor arrangement that the individual has transferred to the LGPS arrangements. Theyalso include any additional pension benefit accrued to the staff member as a result oftheir additional years of pension service in the scheme at their own cost. CETVs arecalculated within the guidelines and framework prescribed by the Institute andFaculty of Actuaries.

2004-2005


4 Other costs


Note £’000

4a Board costsEmoluments 3c 70Training 8Travel and Subsistence 30

Total Board costs 108

4b Members’ CostsFinancial Loss Allowance 101Training 73Travel and Subsistence 393

Total Members’ costs 567

4c Administration costsTravel and Subsistence – staff 261Furniture and Office Equipment 36Telecommunications and Postage 341Publications, Printing and Publicity 85Recruitment, Training and Conferences 174Catering and Hospitality 43Office Supplies 83Subscription to Professional Organisations 20Car hire and Lease Cost 7Removals and Storage 6Professional Services1 1,523Information Technology 262(Profit)/Loss on sale of Fixed Assets 0

2,841

Internal audit fees 16External audit fees 30

Total Administration costs 2,887

1 includes legal fees and outsourced contracts e.g. accounting system, IT support, Payroll.

2004-2005


4e Programme costs

There were no programme costs incurred during the period covered by thesestatements.

5 Depreciation

4d Estates Costs


Note £’000

Rent 825Rates 275Service Charges 217Fixed Maintenance 189Domestic Services 79Heating and Lighting 27Insurance 19Temporary Accommodation 96Security 5Variable Maintenance 203Car Park Charges 11

Total Estates Costs 1,946

Total Other costs 5,508


Note £’000

Intangible Fixed Assets Depreciation charge for period 6 1Tangible Fixed AssetsDepreciation charge for period 7 12

Total Depreciation charge for period 13

2004-2005


6 Intangible Fixed Assets

Software licences

£’000

Cost or ValuationAt 1 April 2004 0Revaluation 0Impairment 0Additions 8Disposals 0

At 31 March 2005 8

DepreciationAt 1 April 2004 0Revaluation 0Impairment 0Additions 1

At 31 March 2005 1

Net Book Value At 31 March 2005 7

Net Book Value At 1 April 2004 0

Donated assets received from the ODPM were fully depreciated in the ODPMaccounts prior to 1 April 2004. These assets do not appear in the VTS Balance Sheetbut are listed in the VTS inventory.

No revaluation has taken place during 2004-05, as all assets are under one year old.

2004-2005


7 Tangible Fixed Assets

Cost or ValuationAt 1 April 2004 0 0 0Revaluation 0 0 0Impairment 0 0 0Additions 49 283 332Disposals 0 0 0

At 31 March 2005 49 283 332

DepreciationAt 1 April 2004 0 0 0Revaluation 0 0 0Impairment 0 0 0Additions 3 9 12Disposals 0 0 0

At 31 March 2005 3 9 12

Net Book Value At 31 March 2005 46 274 320

Net Book Value At 1 April 2004 0 0 0

Donated assets received from the ODPM were fully depreciated in the ODPMaccounts prior to 1 April 2004. These assets do not appear in the VTS Balance Sheetbut are listed in the VTS inventory.

No revaluation has taken place during 2004-05, as all assets are under one year old.

8 Notional Costs

Guidance given by the HM Treasury in respect of NDPBs’ Annual Reports andAccounts requires NDPBs to disclose the full cost of their activities in their accounts.

Furniture, Fittings & Computers TotalOffice Equipment & Other IT

£’000 £’000 £’000

2004-2005


The VTS has therefore included in its accounts charges for the notional cost ofcapital.

The cost of capital has been arrived at by calculating a rate of 3.5 per cent to theaverage capital employed.

The average capital employed is defined as an average of total assets less currentliabilities at 1 April 2004 and 31 March 2005. The total assets are to exclude non-interest bearing bank balances with the Office of the Paymaster General and theBank of England.


Note £’000

Capital employed as at 1 April 2004 0Capital employed as at 31 March 2005 558Average capital employed 279

Notional Interest on Capital @ 3.5% 10

9 Debtors


Note £’000

Due in one yearTrade Debtors 0Accrued Income and Prepayments 524Bad and Doubtful Debt Provision 0Staff Car Loans 10Other Debtors 8

542

Due in more than one yearStaff Car Loans 19

Total Debtors 561

2004-2005


10 Creditors: Amounts falling due within one year


Note £’000

Trade Creditors 164Taxation and Social Security 0Accrued Expenses 230Other Creditors 142

536

11 Deferred Income


Note £’000

Deferred Income 56

12 Provisions for Liabilities and Charges


Note £’000

Balance of provision at 1 April 2004 0Provision for unpaid rent1 40Provision for dilapidation 90Provision utilised in year 0

130

1 Absentee landlord with regards to our Witham Office.

2004-2005


13 Provisions for Pension Liabilities


Note £’000

Balance of provision at 1 April 2004 0Additional charge in year 6,977Provision utilised in year 0

6,977

A provision has been recognised for pension liabilities.

Employers following the Treasury Resource Accounting Manual guidance are requiredto adopt FRS17 in line with the original timetable. As a result, for the financial yearended 31 March 2005, we are required to disclose the FRS17 figures in the primarystatements of our accounts.

For the purpose of FRS17, we commissioned a qualified independent actuary to carryout an assessment of the LGPS as at 31 March 2005. The results of the actuarialvaluation are shown below.

As required under FRS17, we have used the projected unit method of valuation tocalculate the service cost.

The financial assumptions used for the purposes of the FRS17 calculations as at31 March 2004 and 31 March 2005 are shown in the table below.

Price Increases 2.5% – 2.5% –Salary Increases 4.0% 1.5% 4.0% 1.5%Pension Increases 2.5% – 2.5% –Discount Rate 6.0% 3.5% 6.0% 3.5%

Assumptions as at 31 Mar 2005 Real 31 Mar 2004 Real% p.a. % p.a. % p.a. % p.a.

Salary increases are assumed to be 1.5% more than price increases, in line with theassumption used in the latest formal valuations by the vast majority of the funds.We have rebased the results for those Funds that did not have a real salary increaseassumption of 1.5% at the 31 March 2004 formal valuation.

2004-2005


Expected Return on Assets

The expected return on assets is based on the long-term future expected investmentreturn for each asset class as at the beginning of the period (i.e. as at 31 March 2005for the year to 31 March 2006).

FRS17 requires that the expected return on assets is to be set by the VTS havingtaken actuarial advice. The expected returns as at 31 March 2004 and 31 March2005 are shown in the table below:

Equities 7.7% 7.7%Bonds 4.8% 5.1%Property 5.7% 6.5%Cash 4.8% 4.0%

Assets Class Expected Return at Expected Return at31 March 2005 31 March 2004(%per annum) (% per annum)

There is a range of actuarial assumptions that are acceptable under the requirementsof FRS17, particularly in respect of the expected return on equities. We consider thatthese assumptions are within the acceptable range and are thus consistent with therequirements of FRS17. The assumed returns are net of administration andinvestment expenses. Allowance has been included in the cost of accruing benefitsfor expenses to the extent that we have been informed that it has been allowed forin the future service rate.

Balance Sheet disclosure as at31 March 2005

2004-2005


Equities 7.7% 14,685 7.7% 13,446Bonds 4.8% 3,369 5.1% 3,104Property 5.7% 1,353 6.5% 1,226Cash 4.8% 949 4.0% 867

Total 7.0% 20,355 7.0% 18,644

Net Pension Asset as at 31 Mar 2005 31 Mar 2004£’000 £’000

Estimated Employer Assets (A) 20,355 18,643

Present Value of Scheme Liabilities1 25,866 24,559Present Value of Unfunded Liabilities2 1,466 1,472

Total Value of Liabilities (B) 27,332 26,031

Net Pension Asset (A)-(B) (6,977) (7,388)

Long Term Long TermReturn At Assets At Return At Assets At

Assets 31 Mar 2005 31 Mar 2005 31 Mar 2004 31 Mar 2004(Employer) % p.a. £’000 % p.a. £’000

1 We estimate that this liability comprises of approximately £14,807,000, £1,865,000 and £9,194,000 in respect ofemployee members, deferred pensioners and pensioners respectively as at 31 March 2005. The approximationinvolved in the roll forward model means that the split of scheme liabilities between the three classes of membersmay not be reliable for certain types of employers. However, we are satisfied that the approach used leads toreasonable estimates for the aggregate liability figure.

2 It is assumed that all unfunded pensions are payable for the remainder of the staff member’s life. On the death ofthe staff member, their spouse will receive a pension equal to 50% of the member’s staff pension as at the time ofdeath of the staff member. We have assumed 80% of staff members are married and we have assumed mortality tobe in line with pma92c2004/pfa92c2004 (Standard Mortality Tables, 1992 series).

2004-2005


13a Revenue Account Costs for the year to 31 March 2005

Analysis of amount charged to operating profit

Year to 31 March 2005

£’000 (% of Payroll)

Amount Charged to Operating ProfitService Cost 545 14.1Current Service Costs 0 0.0Gains/(Losses) on Curtailment and Settlements 118 3.0Decrease in Irrecoverable Surplus 0 0.0

Total Operating Charge (A) 663 17.1

Amount Credited to Other Finance IncomeExpected Return on Employer Assets 1,298 33.5Interest on Pension Scheme Liabilities (1,559) (40.3)

Net Return/(Charges) (B) (261) (6.7)

Net Revenue Account Cost (A)-(B) 924 23.9

Movement in Surplus/(Deficit) During the Year


£’000

Surplus/(Deficit) at Beginning of the Year (7,387)Current Service Cost (545)Employer Contributions 506Contributions in respect of Unfunded Benefits 91Other Income 0Other Outgoings 0Past Service Costs 0Impact of Settlements and Curtailments (118)Net Return on Assets (261)Actuarial Gains/(Losses) 737

Surplus/(Deficit) at End of Year (6,977)

2004-2005


13b History of Experience Gains and Losses


£’000

Difference Between the Expected and Actual Return on Assets 762Value of Assets 20,356Percentage of Assets 3.7%Experience Gains/(Losses) on Liabilities (25)Total Present Value of Liabilities 27,332Percentage of the Total Present Value of Liabilities (0.1%)Actuarial Gains/(Losses) Recognised in STRGL 737Total Present Value of Liabilities 27,332Percentage of the Total Present Value of Liabilities 2.7%

Projected pension expense for the year to 31 March 2006

Analysis of projected amount to be charged to operating profit for the year to31 March 2006


£’000 (% of Payroll)

Projected Amount Charged to Operating ProfitEstimated Current Service Cost 465 12.4Current Service Costs 0 0.0Gains/(Losses) on Curtailment and Settlements 0 0.0Decrease in Irrecoverable Surplus 0 0.0

Total Operating Charge (A) 465 12.4

Projected Amount Credited to Other Finance IncomeExpected Return on Employer Assets 1,406 37.5Interest on Pension Scheme Liabilities (1,518) (40.5)

Net Return (B) (112) (3.0)

Estimated Net Revenue Account Cost (A)-(B) 577 15.4

2004-2005


14 General Reserve

As at31 March 2005

£’000

Balance at 1 April 2004 15Surplus/(Deficit) for the period (895)

Balance at 31 March 2005 (880)

Staff loans balances not previously recognised by ODPM pre 1 April 2004,VTS has reinstated staff loan balances as at 1 April 2004.

15 Government Capital Reserve

As at31 March 2005

£’000

Balance at 1 April 2004 0Allocated from grant-in-aid (purchase of capital assets) 340Transfer to Income and Expenditure (12)

Balance at 31 March 2005 328

16 Revaluation Reserve

As at31 March 2005

£’000

Balance at 1 April 2004 0Arising on revaluation during the year (pensions) 737

Balance at 31 March 2005 737

2004-2005


17 Pension Fund Reserve

As at31 March 2005

£’000

Balance at 1 April 2004 0Movement in period 6,790

Balance at 31 March 2005 6,790

18 Reconciliation of Movement in funds

As at31 March 2005

£’000

Opening balance of funds 0Movement in funds:Operating Surplus/(Deficit) before interest (895)Staff Loans (transferred from ODPM) 15Grant-in-Aid (Capital Purchases) 340Depreciation Transfer to Income and Expenditure Account (12)Other Recognised Gains and Losses for the year 737Pension Fund Reserves (6,790)

Closing Balance of Funds (6,605)

Represented by:General Reserve (880)Government Capital Reserve 328Revaluation Reserve 737Pension Fund Reserve (6,790)

Closing Balance of Funds (6,605)

2004-2005


19 Reconciliation of Operating Deficit to net cash flow fromoperating activities

As at31 March 2005

£’000

Operating Surplus/(Deficit) before interest 29Depreciation charges 12(Profit)/Loss on disposal of fixed Assets 0(Increase)/Decrease in Debtors (561)Increase/(Decrease) in Creditors 593Increase/(Decrease) in Provisions for Liabilities and Charges 130

Net Cash Inflow/(Outflow) from Operating Activities 203

20 Reconciliation of net cash flow to movement in cashbalance held

As at31 March 2005

£’000

Cash at bank and in hand at 1 April 2004 0Increase/(Decrease) in cash for the year 206

Cash at bank and in hand at 31 March 2005 206

2004-2005


21 Commitments under non-private finance initiative leases

Period ended31 March 2005

£’000

These were annual commitments as at 31 March 2005 to pay rentals under leaseagreements as follows:

Land and BuildingsLeases that:– Expire within 1 year 73– Expire after 1 year but no more than 5 years 1,852– Expire after more than 5 years 1,697

3,622

There were no annual commitments as at 31 March 2005 to pay rental on officeequipment under lease agreements.

22 Capital Commitments

The VTS is committed to making all its offices DDA compliant and is committed tospending £110,000 in the 2005-06 financial year.

23 Commitments under Private Finance Initiative (PFI)

There were no contracted PFI contracts during the reporting period.

24 Related Party Transactions

The VTS is a Non-Departmental Public Body sponsored by the Office of the DeputyPrime Minister which is regarded as a related party. During the course of thereporting period the VTS had a number of significant related party transactions.

None of the Board members, senior management staff or other related parties hasundertaken any material transaction with the Valuation Tribunal Service.

25 Contingent liabilities

No contingent liabilities have been identified as at 31 March 2005.

26 Financial Instruments

Financial Reporting Standard 13 (FRS13), Derivatives and Other Financial Instruments,requires disclosure of the impact of financial instruments have had during the periodin creating or changing the risks an entity faces in undertaking its activities. Becauseof the largely non-trading nature of its activities and the way government agenciesare financed, the VTS is not exposed to the degree of financial risk faced by businessentities. Moreover, financial instruments play a much more limited role in creating orchanging risk than would be typical of the listed companies to which FRS13 mainlyapplies. The VTS has very limited powers to borrow or invest surplus funds andfinancial assets and liabilities are generated by day-to-day operational activities andare not held to change the risks facing the VTS in undertaking its activities.

As permitted by FRS13, debtors and creditors which mature or become payable within12 months from the Balance Sheet date have been omitted from the currency profile.

Liquidity risk

The VTS’ net revenue resource requirements are financed by resources voted annuallyby Parliament, just as its capital expenditure. The VTS is not, therefore, exposed tosignificant liquidity risks.

Interest rate risk

All of the VTS’ financial assets and liabilities carry nil or fixed rates of interest and it isnot, therefore, exposed to significant interest rate risk.

27 Performance against targets

The VTS has delivered on its 2004-05 business plan targets within its grossgrant-in-aid entitlement (£11,893,000) for the 2004-05 financial year, drawing-down£10,950,000 (Revenue £10,610,000 and Capital £340,000) which represents92.07% of its grant-in-aid entitlement.

Business plan targets have been accomplished whilst absorbing the setting up of itshead office in London. Success has also been achieved in the reduction of the costper appeal from £38.18 (2003-041) to £34.71 (2004-05).

Key objectives, targets, milestones and achievements are shown in Appendix 4.

2004-2005


1 source Valuation Tribunal Management Board.

Appendix 1

Accounts Direction

THE VALUATION TRIBUNAL SERVICE

ACCOUNTS DIRECTION GIVEN BY THE FIRST SECRETARY OF STATE WITH THE CONSENT OF THETREASURY, IN ACCORDANCE WITH PARAGRAPH 20(2) OF SCHEDULE 4 TO THE LOCALGOVERNMENT ACT 2003

1. The annual accounts of The Valuation Tribunal Service (hereafter in this accounts direction referredto as “the Service”) shall give a true and fair view of the income and expenditure and cash flowsfor the year and the state of affairs at the year-end. Subject to this requirement, the annualaccounts for the period ending 31 March 2005 and for subsequent accounting periods, untilsuperseded, shall be prepared in accordance with:

(a) the accounting and disclosure requirements given in Government Accounting and in theTreasury guidance Executive Non-Departmental Public Bodies Annual Reports and AccountsGuidance (and its replacement, the Financial Reporting Manual), as amended or augmentedfrom time to time;

(b) any other relevant guidance that the Treasury may issue from time to time;

(c) any other specific disclosure requirements of the First Secretary of State;

in so-far as these requirements are appropriate to the Service and are in force for the year forwhich the accounts are prepared, and except where agreed otherwise with the First Secretary ofState and the Treasury, in which case the exception shall be described in the notes to the accounts.

2. Schedule 1 to this direction gives clarification of the application of the accounting and disclosurerequirements of the Companies Acts and accounting standards. Additional disclosure requirementsof the First Secretary of State and further explanation of Treasury requirements are set out inSchedule 2.

3. This direction shall be reproduced as an appendix to the annual accounts.

Signed by authority of the First Secretary of State

An officer in the Office of the Deputy Prime Minister

Date 8 February 2005

2004-2005


SCHEDULE 1

1. Stocks and work in progress shall be included in the balance sheet at the lower of estimatedreplacement cost and estimated net realisable value.

2. Central government grants used to pay for fixed assets, stocks or work in progress shall be creditedto a grant reserve. This differs from the requirement in accounting standards that such grants mustbe credited to deferred income.

3. With one exception, revaluation gains on fixed assets, stocks or work in progress, to the extent thatthe assets were financed by central government grants, shall be taken to the grant reserve in thebalance sheet, without passing through the income and expenditure account. To the extent thatthe assets were financed by funds from other sources, revaluation gains shall be taken to therevaluation reserve in the balance sheet. This differs from the requirement of the Companies Actthat all revaluation gains must be taken to one separate reserve. The exception is that anyrevaluation gain that reverses a previous revaluation loss should be taken to the income andexpenditure account to the extent that the previous loss was itself taken to the income andexpenditure account.

4. On the disposal of fixed assets, stock or work in progress, any amount in the grant reserve relatingto the assets shall be transferred directly to the general reserve in the balance sheet, withoutpassing through the income and expenditure account.

5. On the disposal of a fixed asset financed wholly by central government grants, the profit or loss ondisposal shall be offset in the income and expenditure account by an equal and opposite amounttransferred to or from the general reserve. Where central government grants were only used tofinance a part of the cost of the asset, the amount of the transfer to or from the general reserveshall be reduced in proportion.

6. The foreword and balance sheet shall each be signed and dated by the chairman on behalf of theboard members, and by the accounting officer.

2004-2005


SCHEDULE 2

ADDITIONAL DISCLOSURE REQUIREMENTS

The following information shall be disclosed in the annual accounts, as a minimum, and in addition tothe information required to be disclosed by paragraphs 1 and 2 of this direction.

1. The foreword

A statement on the Service’s policy for conserving energy, reducing waste and minimising therelease of greenhouse gases.

2. The notes to the annual accounts

(a) an analysis of grants from:

(i) government departments

(ii) European Community funds

(iii) other sources identified as to each source;

(b) For grants from the Office of the Deputy Prime Minister, the following information shall alsobe shown:

(i) the amount that the Service is entitled to receive for the year

(ii) the amount received during the year

(iii) the amount released to the income and expenditure account for the year

(iv) the amount used to acquire or improve fixed assets in the year

(v) movements on amounts carried forward in the balance sheet

and the note should make it possible to reconcile any of the amounts in (i) to (v) above, to each ofthe other amounts;

(c) an analysis of grants included as expenditure in the income and expenditure account and astatement of the total value of grant commitments not yet included in the income andexpenditure account;

(d)* a report on the emoluments of each individual board member and key manager during theyear (with separate disclosure where more than one person occupied an office). The reportshall include full details of all elements in the remuneration package of each person, such asfees, salary, annual bonuses, payment on termination of office, other taxable benefits, pensioncontributions, and the performance related elements of these (for which the basis on whichthe performance is measured shall be explained). For this purpose, a key manager means thechief executive, members of the management board and all employees reporting direct to thechief executive. For each board member, the report shall also show the time commitment interms of days per month;

(e)* if a board member, the chief executive or a senior manager has been appointed for a fixedterm or is on a fixed-term service contract, the term shall be stated together with details of anypredetermined compensation on termination of office;

(f)* a statement of the pension entitlements earned by the chief executive and by each individualboard member and senior manager during the year, disclosed on a basis recommended for

2004-2005


non-departmental public bodies by the Treasury, or recommended for listed companies by theFaculty of Actuaries and the Institute of Actuaries;

(g) details of employees, other than board members, showing:

(i) the average number of persons employed during the year, including part-time employees,agency or temporary staff and those on secondment or loan to the Service, but excludingthose on secondment or loan to other organisations, analysed between appropriatecategories (one of which is those whose costs of employment have been capitalised)

(ii) the total amount of loans to employees

(iii) employee costs during the year, showing separately:

(1) wages and salaries

(2) early retirement costs

(3) social security costs

(4) contributions to pension schemes

(5) payments for unfunded pensions

(6) other pension costs

(7) amounts recoverable for employees on secondment or loan to other organisations

(The above analysis shall be given separately for the following categories:

I employed directly by the Service

II on secondment or loan to the Service

III agency or temporary staff

IV employee costs that have been capitalised);

(h) an analysis of liquid resources, as defined by accounting standards;

(i) in the note on debtors, prepayments and payments on account shall each be identified separately;

(j) a statement of debts written off and movements in provisions for bad and doubtful debts;

(k) a statement of losses and special payments during the year, being transactions of a type whichParliament cannot be supposed to have contemplated. Disclosure shall be made of the total oflosses and special payments if this exceeds £100,000, with separate disclosure and particularsof any individual amounts in excess of £100,000. Disclosure shall also be made of any loss orspecial payment of £100,000 and below if it is considered material in the context of theService’s operations.

(l)* particulars, as required by the accounting standard on related party disclosures, of materialtransactions during the year and outstanding balances at the year end (other than thosearising from a contract of service or of employment with the Service), between the Service anda party that, at any time during the year, was a related party. For this purpose, notwithstandinganything in the accounting standard, the following assumptions shall be made:

(i) transactions and balances of £5,000 and below are not material

(ii) parties related to board members and key managers are as notified to the Service by eachindividual board member or key manager

2004-2005


(iii) the following are related parties:

(1) subsidiary and associate companies of the Service

(2) pensions funds for the benefit of employees of the Service or any subsidiarycompanies (although there is no requirement to disclose details of contributions tosuch funds)

(3) board members and key managers of the Service

(4) members of the close family of board members and key managers

(5) companies in which a board member or a key manager is a director

(6) partnerships and joint ventures in which a board member or a key manager is apartner or venturer

(7) trusts, friendly societies and industrial and provident societies in which a boardmember or a key manager is a trustee or committee member

(8) companies, and subsidiaries of companies, in which a board member or a keymanager has a controlling interest

(9) settlements in which a board member or a key manager is a settlor or beneficiary

(10) companies, and subsidiaries of companies, in which a member of the close family ofa board member or of a key manager has a controlling interest

(11) partnerships and joint ventures in which a member of the close family of a boardmember or of a key manager is a partner or venturer

(12) settlements in which a member of the close family of a board member or of a keymanager is a settlor or beneficiary

(13) the Office of the Deputy Prime Minister, as the sponsor department for the Service.

For the purposes of this sub-paragraph:

(i) A key manager is as defined in sub-paragraph 3(d), above.

(ii) The close family of an individual is the individual’s spouse, the individual’s relatives andtheir spouses, and relatives of the individual’s spouse. For the purposes of this definition,“spouse” includes personal partners, and “relatives” means brothers, sisters, ancestors,lineal descendants and adopted children.

(iii) A controlling shareholder of a company is an individual (or an individual acting jointly withother persons by agreement) who is entitled to exercise (or control the exercise of) 30%or more of the rights to vote at general meetings of the company, or who is able tocontrol the appointment of directors who are then able to exercise a majority of votes atService meetings of the company.

* 3(d), 3(e), 3(f) and 3(l). Under the Data Protection Act 1998 and the Human Rights Act 1998, the Service needs to obtain consent for some of theinformation in these sub-paragraphs to be disclosed. If consent is withheld, or if for any other reason information is not available, this shall be statedin the note.

2004-2005


Tribunal Workload

Valuation Tribunals – Total of all Types of Appeals1 April 2004 to 31 March 2005

Appendix 22004-2005


Non-Appeals Appeals Standard Standard Total Appeals

Tribunals b/f Received Settled Decisions Decisions Cleared c/f

NorthCumbria 2,075 1,339 2,001 237 135 2,373 1,975Durham & Teesside 5,377 3,149 5,884 143 156 6,183 2,343Northumberland/Tyne & Wear 7,824 3,934 7,854 386 149 8,389 3,369Total 15,276 8,422 15,739 766 440 16,945 7,687

YorkshireEast Yorkshire 5,905 2,631 4,977 677 115 5,769 2,767North Yorkshire 3,822 1,660 3,742 282 127 4,151 1,331South Yorkshire 6,698 4,068 5,756 330 219 6,305 4,461West Yorkshire 11,849 8,312 10,963 1,122 226 12,311 7,850Total 28,274 16,671 25,438 2,411 687 28,536 16,409

North WestLancashire 4,245 3,228 3,796 816 255 4,867 2,606Manchester North/South 24,209 11,073 19,580 3,717 600 23,897 11,385Merseyside & Cheshire 11,572 5,859 20,653 1,709 253 12,707 4,724Total 40,026 20,160 44,029 6,242 1,108 41,471 18,715

West MidlandsBirmingham 6,683 3,973 6,317 354 122 6,793 3,863Coventry/Solihull/Warwickshire 4,894 2,561 4,526 173 61 4,760 2,695Herefordshire/Worcestershire/West Midlands West 9,615 5,668 9,513 994 103 10,610 4,673Staffordshire/Shropshire 7,151 4,278 7,464 1,132 72 8,668 2,761Derbyshire 4,548 3,119 4,552 831 83 5,466 2,201Total 32,891 19,599 32,372 3,484 441 36,297 16,193

East MidlandsLeicestershire/Nottinghamshire/Northamptonshire 11,279 5,865 13,455 904 446 14,805 2,339

EasternCambridgeshire 3,713 1,804 3,692 109 41 3,842 1,675Lincolnshire 4,515 2,289 4,087 79 190 4,356 2,448Norfolk 10,030 6,438 9,093 1,154 442 10,689 5,779Suffolk 2,601 1,518 2,663 130 75 2,868 1,251Total 20,859 12,049 19,535 1,472 748 21,755 11,153

2004-2005


Continuation – Total of all Types of Appeals1 April 2004 to 31 March 2005



Home Counties NorthBedfordshire & Hertfordshire 8,196 3,570 6,749 1,490 339 8,578 3,188Essex 4,664 3,399 5,613 622 315 6,550 1,513Total 12,860 6,969 12,362 2,112 654 15,128 4,701

London Central & NorthCentral London 22,734 12,901 16,375 1,019 370 17,764 17,871London North East 10,256 6,566 9,336 1,234 502 11,072 5,750London North West 16,053 6,871 11,465 2,405 202 14,072 8,852Total 49,043 26,338 37,176 4,658 1,074 42,908 32,473

London SouthLondon South East 7,929 4,874 7,128 1,406 110 8,644 4,159London South West 10,039 5,972 7,775 1,586 119 9,480 6,531Total 17,968 10,846 14,903 2,992 229 18,124 10,690

Home Counties SouthEast & West Sussex 8,720 4,245 6,067 2,031 101 8,199 4,766Kent 8,027 3,265 6,119 1,613 141 7,873 3,419Surrey 6,962 3,045 5,425 892 46 6,363 3,644Total 23,709 10,555 17,611 4,536 288 22,435 11,829

Thames ValleyBerkshire 5,323 2,226 4,009 305 93 4,407 3,142Oxfordshire/Buckinghamshire 6,844 3,768 6,281 948 73 7,302 3,310Total 12,167 5,994 10,290 1,253 166 11,709 6,452

SouthernHampshire/Isle of Wight/Wiltshire 13,684 5,787 13,335 0 1,052 14,387 5,084

WessexDorset & Somerset 5,473 3,894 5,348 1,130 351 6,829 2,538Severnside & Gloucestershire 7,459 3,585 7,938 815 156 8,909 2,135Total 12,932 7,479 13,286 1,945 507 15,738 4,673

South WestDevon/Cornwall/Isles of Scilly 8,810 5,473 9,805 696 242 10,743 3,540

TOTAL 299,778 162,207 279,336 33,471 8,082 310,981 151,938

2004-2005


Valuation Tribunal – Totals of Non Domestic Rating Appeals (NDR)1 April 2004 to 31 March 2005



NorthCumbria 1,952 937 1,686 192 65 1,943 946Durham & Teesside 5,292 2,725 5,573 141 90 5,804 2,213Northumberland/Tyne & Wear 9,620 4,537 9,280 521 197 9,998 4,159Total 16,864 8,199 16,539 854 352 17,745 7,318

YorkshireEast Yorkshire 5,814 2,144 4,584 605 83 5,272 2,686North Yorkshire 3,738 1,277 3,379 247 111 3,737 1,278South Yorkshire 6,539 3,716 5,447 293 147 5,887 4,368West Yorkshire 11,753 7,345 10,132 1,036 189 11,357 7,741Total 27,844 14,482 23,542 2,181 530 26,253 16,073

North WestLancashire 4,062 2,548 3,279 689 179 4,147 2,463Manchester North/South 23,669 10,145 18,595 3,538 509 22,642 11,172Merseyside & Cheshire 11,313 5,036 10,056 1,568 152 11,776 4,573Total 39,044 17,729 31,930 5,795 840 38,565 18,208

West MidlandsBirmingham 6,659 3,736 6,116 337 106 6,559 3,836Coventry/Solihull/Warwickshire 4,806 2,154 4,220 157 24 4,401 2,559Herefordshire/Worcestershire/West Midlands West 9,431 4,853 8,869 892 49 9,810 4,474Staffordshire/Shropshire 6,950 3,496 6,751 1,031 31 7,813 2,633Derbyshire 4,315 2,648 4,075 758 24 4,857 2,106Total 32,161 16,887 30,031 3,175 234 33,440 15,608

East MidlandsLeicestershire/Nottinghamshire/Northamptonshire 11,035 4,741 12,479 833 285 13,597 2,179

EasternCambridgeshire 3,651 1,481 3,418 107 27 3,552 1,580Lincolnshire 4,441 1,905 3,789 38 143 3,970 2,376Norfolk 9,868 5,706 8,589 1,094 394 10,077 5,497Suffolk 2,493 999 2,207 106 35 2,348 1,144Total 20,453 10,091 18,003 1,345 599 19,947 10,597

2004-2005


Continuation – Totals of Non Domestic Rating Appeals (NDR)1 April 2004 to 31 March 2005



Home Counties NorthBedfordshire & Hertfordshire 8,099 2,898 6,372 1,285 274 7,931 3,066Essex 4,484 2,474 4,860 483 241 5,584 1,374Total 12,583 5,372 11,232 1,768 515 13,515 4,440

London Central & NorthCentral London 22,659 12,584 16,050 1,004 367 17,421 17,822London North East 10,042 5,716 8,736 1,100 405 10,241 5,517London North West 15,517 5,535 10,629 2,114 131 12,874 8,178Total 48,218 23,835 35,415 4,218 903 40,536 31,517

London SouthLondon South East 7,712 3,815 6,463 1,159 13 7,635 3,892London South West 9,671 4,916 6,960 1,394 28 8,382 6,205Total 17,383 8,731 13,423 2,553 41 16,017 10,097

Home Counties SouthEast & West Sussex 8,597 3,271 5,265 1,948 21 7,234 4,634Kent 7,937 2,370 5,537 1,489 26 7,052 3,255Surrey 6,791 2,473 5,115 665 6 5,786 3,478Total 23,325 8,114 15,917 4,102 53 20,072 11,367

Thames ValleyBerkshire 5,242 1,810 3,731 245 46 4,022 3,030Oxfordshire/Buckinghamshire 6,669 2,774 5,434 836 32 6,302 3,141Total 11,911 4,584 9,165 1,081 78 10,324 6,171

SouthernHampshire/Isle of Wight/Wiltshire 13,445 4,476 12,344 0 737 13,081 4,840

WessexDorset & Somerset 5,218 2,654 4,443 966 272 5,681 2,191Severnside & Gloucestershire 7,244 2,525 6,984 741 102 7,827 1,942Total 12,462 5,179 11,427 1,707 374 13,508 4,133

South WestDevon/Cornwall/Isles of Scilly 8,473 3,644 8,207 600 126 8,933 3,184

TOTAL 295,201 136,064 249,654 30,212 5,667 285,533 145,732

2004-2005


Valuation Tribunals – Council Tax Banding Appeals1 April 2004 to 31 March 2005



NorthCumbria 120 389 312 45 64 421 88Durham & Teesside 66 402 315 8 56 379 89Northumberland/Tyne & Wear 68 332 222 50 12 284 116Total 254 1,123 849 103 132 1,084 293

YorkshireEast Yorkshire 78 469 383 68 24 475 72North Yorkshire 75 370 348 35 13 396 49South Yorkshire 117 331 295 35 45 375 73West Yorkshire 78 939 819 81 20 920 97Total 348 2,109 1,845 219 102 2,166 291

North WestLancashire 150 646 490 121 52 663 133Manchester North/South 450 871 937 139 56 1,132 189Merseyside & Cheshire 164 793 638 123 75 836 121Total 764 2,310 2,065 383 183 2,631 443

West MidlandsBirmingham 21 228 197 17 9 223 26Coventry/Solihull/Warwickshire 83 400 299 16 33 348 135Herefordshire/Worcestershire/West Midlands West 179 800 637 102 43 782 197Staffordshire/Shropshire 188 773 706 99 34 839 122Derbyshire 221 452 470 73 48 591 82Total 692 2,653 2,309 307 167 2,783 562

East MidlandsLeicestershire/Nottinghamshire/Northamptonshire 240 1,108 969 71 159 1,199 149

EasternCambridgeshire 48 312 269 2 7 278 82Lincolnshire 69 342 285 41 26 352 59Norfolk 159 731 503 60 47 610 280Suffolk 71 512 425 23 29 477 106Total 347 1,897 1,482 126 109 1,717 527

2004-2005


Continuation – Valuation Tribunals – Council Tax Banding Appeals1 April 2004 to 31 March 2005



Home Counties NorthBedfordshire & Hertfordshire 91 642 366 205 45 616 117Essex 176 909 749 138 60 947 138Total 267 1,551 1,115 343 105 1,563 255

London Central & NorthCentral London 61 316 314 12 3 329 48London North East 120 808 558 92 63 713 215London North West 446 1,285 800 250 49 1,099 632Total 627 2,409 1,672 354 115 2,141 895

London SouthLondon South East 199 1,015 652 247 75 974 240London South West 309 1,025 793 186 72 1,051 283Total 508 2,040 1,445 433 147 2,025 523

Home Counties SouthEast & West Sussex 110 957 792 81 70 943 124Kent 73 849 575 121 86 782 140Surrey 102 562 306 226 36 568 96Total 285 2,368 1,673 428 192 2,293 360

Thames ValleyBerkshire 76 407 274 58 43 375 108Oxfordshire/Buckinghamshire 167 971 840 110 29 979 159Total 243 1,378 1,114 168 72 1,354 267

SouthernHampshire/Isle of Wight/Wiltshire 185 1,289 962 0 293 1,255 219

WessexDorset & Somerset 241 1,227 902 164 66 1,132 336Severnside & Gloucestershire 208 1,033 949 74 33 1,056 185Total 449 2,260 1,851 238 99 2,188 521

South WestDevon/Cornwall/Isles of Scilly 327 1,807 1,591 95 101 1,787 347

TOTAL 5,536 26,302 20,942 3,268 1,976 26,186 5,652

Appendix 32004-2005


Mr Ian Andrews President of the Dorset VT

Mr Peter Ashton President of the Essex South VT

Mr Michael Atkins President of the Surrey VT

Mr Garry Bean President of the Birmingham VT

Mr Murray Bell President of the Hampshire South VT

Mr Raymond Bennett President of the Durham VT

Mr John Birkbeck President of the Cornwall VT

Mr John Bosson President of the Lancashire VT

Mr John Burcher President of the Gloucestershire VT

Mr Derek Carline President of the Kent VT

Mr Paul Chittenden President of the Hertfordshire VT

Mr Dave Church President of the West Midlands West VT

Mr Bill Clements President of the East Sussex VT

Mrs Angela Comfort OBE President of the Essex North VT

Mr Antony Craig President of the Central London VT

Mr Maurice Crosswell President of the London South West VT

Mr Tony Dingley President of the Isles of Scilly VT

Mr Jim Dixon President of the Lincolnshire VT

Mr George Dunn President of the Manchester South VT

Mr John Dunning President of the Norfolk VT

Mrs Mary Fagan President of the East Yorkshire VT

Mr Lyell Fairlie President of the Hampshire North VT

Mrs Jane Fitzgerald President of the Wiltshire VT

Mr Stephen Fowler President of the Somerset VT

Mr Bill Glover President of the Tyne & Wear VT

Mr Stanley Gorman President of the Merseyside VT

Mr Philip Harrison President of the Manchester North VT

Mr Brian Hill President of the West Sussex VT

Mr Grahame Holloway President of the Devon VT

Mr Peter Hurlstone President of the Shropshire VT

Mr Ian Irvine President of the Teesside VT

Title First name Surname Valuation Tribunal

Presidents of Valuation Tribunals as at 31 March 2005.

2004-2005


Mrs Ann Jacobs President of the Isle of Wight VT

Mr Peter Jewell President of the Herefordshire & Worcestershire VT

Mr Aubrey John President of the Oxfordshire VT

Mr John Jones President of the Bedfordshire VT`

Mr Peter Lawton President of the Suffolk VT

Mr Bill Miller President of the North Yorkshire VT

Mr Joe Osborne President of the Derbyshire VT

Mr Jayantilal Patel President of the London North East VT

Mr Anthony Ritchie President of the London South East VT

Mr Tom Sale OBE President of the Northumberland VT

Mr David Sheard President of the West Yorkshire VT

Mr Jeremy Smith President of the Cheshire VT

Mrs Clementine Smith President of the Severnside VT

Mr Martin Suthers OBE President of the Nottinghamshire VT

Mr Brian Talfourd-Cook President of the Berkshire VT

Mr Roy Taylor President of the Warwickshire VT

Mr Michael Tildesley President of the Leicestershire VT

Mr Denver Tolley President of the Staffordshire VT

Mr Richard Tomlinson President of the London North West VT

Mr Jim Walker President of the Buckinghamshire VT

Mr David Waters President of the Northamptonshire VT

Mr Paul Wood OBE President of the South Yorkshire VT

Mr Kevin Woodthorpe President of the Cambridgeshire VT

Mr John Woolley President of the Cumbria VT

Mr David Young President of the Coventry & Solihull VT

Title First name Surname Valuation Tribunal

Continuation – Presidents of Valuation Tribunals as at 31 March 2005.

Appendix 42004-2005


VTS Objectives, Targets, Time bound Tasks and Key Performance Indicators (KPIs) for 2004-05

VTS Objective: Service Delivery

The Chief Executive will agree withthe Valuation Office Agency (VOA) aglobal clearance figure by 30 May2004 for Council Tax andNon-Domestic Rating.

Quarterly meetings between the VTSand the VOA to ensure effectivenessof Memorandum of Agreement andaddress ongoing issues.

Fully achieved.

Memorandum of Agreementbetween the VOA and the VTS to beagreed and delivered by both partiesby 30 September 2004.

Implementation of a jointMemorandum of Agreementbetween VOA and VTS to ensureuniform geographical practices.

Fully achieved.

The Heads of Administration to liaisewith the presidents of valuationtribunals to ensure all appeals arelisted within regulatory guidelines.

On a quarterly basis monitorthe following:– Number of appeals listed– Clearance rates– Number of appeals settled before

hearing– Number of appeals settled after

hearing– Number of tribunals convened– Number of tribunals cancelled– Number of postponements and

adjournments.

Fully achieved.

Targets How Measured

What This Means

Key Tasks

To deliver a high quality appeals service that is responsive to the needsof Valuation Tribunal users.

To effectively and efficiently manage the disposal of appeals.

2004-2005


Continuation – VTS Objective: Service Delivery


Devise and issue complaintsprocedure for the Chief Executive’sOffice by 31 July 2004.

Monitor, report and address issuesraised on the national complaintsregister.

Fully achieved.

Heads of Administration to ensurethat a local register is in place tomonitor any such complaints by31 July 2004.

Monitor complaint handling timesfrom receipt of complaint untilresolved.

Fully achieved.

Devise a national complaints registerby 31 July 2004.

Report types of complaints in the VTS’Annual Report.

Fully achieved.

What This Means

Key Tasks

To implement a national complaints charter and devise a nationalregister to monitor complaints.

In recognition that the Chief Executive is the Principal Officer forhandling cases involving the Parliamentary Commissioner forAdministration, his Office will devise a national complaints charter forcirculation to all Valuation Tribunal offices.


2004-2005






Quarterly meetings of the RatingLiaison Group (RLG) to be convenedto include the VOA, RSA, IRRV andRICS to discuss issues affecting thebusiness of the VTS.

Improve the frequency and quality ofour contact with stakeholders.

Fully achieved.

Regular liaison meetings with theODPM to discuss sponsorship issues.

Fully achieved.

Key Tasks Revise existing family of guidance leaflets.

Revised guidance leaflets to reflectthe changes introduced by the newcorporate body and to be printed anddistributed by 16 August 2004.

All leaflets to obtain the Plain EnglishCrystal mark to ensure clarity andcustomer understanding.

Fully achieved.

Undertake a review of currentexternal communications to becompleted by the end of thefinancial year.

Publishing the CommunicationsStrategy on the web-site.

Fully achieved.

Produce and evaluate questionnaire. Partly achieved– survey completedon 31 March 2005.Findings to beevaluated andanalysed in April2005.

What This Means

Key Tasks

Develop a comprehensive communications strategy to inform externalstakeholders and internal staff on the role, function status anddevelopment of Valuation Tribunals.

Develop a Communications Strategy.

2004-2005








Key Tasks All leaflets are to comply with the Disability Discrimination Act 1995.

Key Tasks All leaflets are to comply with the Race Relations Act 1976 andRace Relations Act 2000.

Key Tasks Develop and manage the VTS web-site, including Members’ Pages, andIntranet to allow greater flow of information.

The Chief Executive’s Office willensure all guidance leaflets will beavailable in audio and Braille by30 October 2004.

Fully achieved.

To translate upon request guidanceleaflets in other languages andmaintain a register of languagessought.

Fully achieved.

The web-site and Intranet will bereviewed and revised to reflect thenew corporate image by the end ofthe year. The web-site will be regularlyupdated to ensure timely and relevantinformation is accessible at all times.

Monitor and analyse web access bothto the home page, and consequentialpages accessed by monitoring ‘hits’quarterly.

Partly achieved.Consultantsappointed to carryout the review.Development workwill take placeduring 2005-2006Financial Year.

Key Tasks The Chief Executive’s Office will collate findings of past customersurveys undertaken by individual Valuation Tribunals.

Heads of Administration to providedetails of customer survey findingscarried out within their AdministrativeUnit and prepare a report to the ChiefExecutive’s Office by 30 June 2004.

Review findings and plan outline ofcustomer survey to be issued in2005-06.

Fully achieved.

2004-2005




VTS Objective – Judicial Liaison


What This Means

Key Tasks

To assist in providing an interface between the administrative andjudicial roles of Valuation Tribunals.

Subject to the outcome on the ODPM’s public consultation ‘JudicialIndependence’, the VTS will set up a forum to facilitate a meaningfuldialogue between the judicial and administrative functions ofValuation Tribunals.

An interim committee (TribunalLiaison Committee) to be created by31 May 2004. Meetings are to beheld on a quarterly basis until suchtime as the consultation process hasbeen completed and the Secretary ofState has agreed on the best wayforward.

Published minutes of the Committeeon the Members’ pages of theweb-site.

Fully achieved.

TLC disbanded in January 2005

Members’ Judicial Committee (MJC)in process of being set-up.

Nominations for MJC Members to becompleted by 31 March 2005.

Fully achieved.

Effective communications betweenthe judiciary and administrativesections of the Valuation Tribunals,ensuring a cohesive, unified VTS.

Fully achieved.

What This Means

Key Tasks

To provide Clerks of Tribunals to act as chief judicial advisors tomembers of Valuation Tribunals.

Ensure that statutory Clerks are effective in the provision of adviceat hearings.

Provision of training to Clerks andtribunal-taking staff as part of thestaff development process.

Appraisal system. Partly achieved.– New system tobe introduced by30th July 2005.

Fully achieved.

2004-2005




VTS Objective Management Structure


What This Means

Key Tasks

To integrate the Chief Executive’s Office into the existingadministrative structure.

The Chief Executive and Directors will provide advice and guidance tosenior managers within Valuation Tribunals and be proactive on allaspects of the business.

Development of a coherentframework for effectivecommunication between the Chief Executive’s Office and HOAsleading to a consistent, qualitydelivery of local services.

Set up Executive Management Team(EMT) monthly meetings comprisingthe Chief Executive and Directors.

Fully achieved.

Introduction of line managerframework for staff.

Organise monthly SeniorManagement Team (SMT) meetingscomprising the Chief Executive, theDirectors and HOAs.

Fully achieved.

What This Means Assist the Board in providing interface on policy and strategy mattersbetween the administrative and judicial systems.

Develop knowledge of the Boardenabling informed and effectiveguidance on strategic issues withinthe Valuation Tribunals.

Develop Training Programme forBoard members to be held after eachBoard Meeting on bothadministrative and judicial issueswithin the VTS.

Fully achieved.

Regular presentations to the Board byChief Executive Office Managers ontheir areas of specialisation.

Fully achieved.

Undertake a risk assessment reviewto identify the risks and produce arisk register by 30 November.

Implementation of the RiskManagement Strategy.

Fully achieved.

Risk register to be reviewed by theBoard on a quarterly basis.

Fully achieved.

2004-2005





Continuation – VTS Objective Management Structure


Key Tasks Ensure that the Transfer of Undertakings (Protection of Employment)process was effective.

The Chief Executive will consult withstaff and workplace unions regardingthe matter of union recognition forcollective bargaining purposes by30 October 2004.

Confirmation of a single staff union. Fully achieved.

The Chief Executive will meet withUNISON by 31 July 2004 to reviewany outstanding TUPE issuesfollowing transfer.

Key Tasks Address the union recognition for collective bargaining betweenUNISON and SATA.

Key Tasks Undertake a feasibility study to review Management InformationSystems (MIS).

Complete feasibility study by 31 July2004 and provide Board withrecommendation for introduction ofMIS system.

Fully achieved.

Fully achieved.

2004-2005





VTS Objective – Staff and Staff Training


What This Means

Key Tasks

To foster a well-trained and motivated work force with appropriateskills within an effective management system

Review the Staff Development Review (SDR) process to ensure it meetsthe needs of the Valuation Tribunal Service.

Key Tasks Undertake staff training needs analysis.

Key Tasks Develop and maintain training database

Cost and devise training strategy by30 November 2004.

Implementation of the TrainingStrategy.

Fully achieved.

Heads of Administration to discussthe process with the Unit staff andprovide a report to the ResourceDirector by 30 June 2004.

Analyse reports. Fully achieved.

Set up Training Needs Project Group(TNPG) to include representation fromall grades within the VTS by 31 July2004.

Terms of Reference and minutesof meetings.

Fully achieved.

TNPG to formulate and devisetraining needs questionnaire anddistribute to all staff by 1 September2004.

Analyse results of questionnaire toensure accurate reflection of staffneeds which will feed into thetraining policy.

Fully achieved.

Based on feasibility study of MISdevelop Phase 1 of MIS database asan HR and training database by31 March 2005.

Central record of staff skills and VTSgroup knowledge base.

Fully achieved.

Accurate record of staff trainingdetails.

Fully achieved.

2004-2005




Key Tasks To ensure the provision of a healthy working environment for staff.

Continuation – VTS Objective – Staff and Staff Training


Introduce a VTS Health and SafetyPolicy Statement that recognises theVTS as a corporate body and meetsall relevant legislation by 30 June2004.

Monitor attendances, track careerprogression and cost benefit analysis.

Fully achieved.

Heads of Administration to provide aHealth and Safety report to ChiefExecutive’s Office by 31 March 2005.

Awareness of the Policy Statement byall VTS staff in offices.Implementation of Accident Booksand a monitoring system to recordnumbers of incidents during the year,the course of action taken, thenumber of accidents which resultedin more than three days absence fromwork and the risks identified and howsuch risks were addressed.

Fully achieved.

To establish a VTS Health and SafetyCommittee, comprising appointedHealth and Safety Officers, chaired bythe Corporate Director.

Fully achieved.

To undertake asbestos surveys acrossthe VTS estate in accordance withstatutory requirements.

Appoint Health and Safety Officersfor each Administrative Unit.

Fully achieved.

Conduct full access audits across theVTS estate and translate into actionplans by 31 October 2004.

Health and Safety Officer to assistHeads of Administration to ensureworks recommended by the DisabilityDiscrimination Act (DDA) audits areenforced and completed withintimescale stipulated. Agree a three-phased implementation programmefor monitoring purposes.

Fully achieved.

Key Tasks To achieve full DDA compliance across the VTS estate.

2004-2005





Continuation – VTS Objective – Staff and Staff Training


Key Tasks To review position of properties occupied by means ofinter-departmental agreements (MOTO’s)

Key Tasks To research and work towards Investors in People accreditation as acorporate body.

Implementation of Phase 1 of DDA,compliance by 1 October 2004.

Fully achieved.

Implementation of Phase 2 of DDA,compliance by 31 October 2004.

Fully achieved.

Arrange for asbestos surveys to beundertaken by 30 June 2004.

Review results of surveys and actaccordingly.

Fully achieved.

Enter into negotiations with landlordswith a long term aim of securingleasehold occupation of properties.

Monitor and evaluate progress ofdiscussions on a monthly basis.

Partly achieved.– ongoing for2005-06 FinancialYear.

Undertake research across the VTS,evaluating the requirementsnecessary working towards the longterm objective to attain fullaccreditation status. To be completedby 31 March 2005.

Evaluate the research undertaken. Partly achieved.– ongoing for2005-06 FinancialYear.

Maintain an asbestos register.

Key Tasks Continuation – To achieve full DDA compliance across the VTS estate.

2004-2005




VTS Objective – Member and Member Training


What This Means

Key Tasks

To ensure a well trained lay membership of Valuation Tribunals, and tokeep the membership updated with any changes in relevant legislation.

To revise Members’ Training Programme.

Provision of accurate information tothe Cabinet Office on the diversity ofthe membership within ValuationTribunals.

In consultation with the interimTribunals Liaison Committee, the VTSBoard to consider recommendationsfor the future use and developmentof the appraisal system.


Fully achieved.To implement an equal opportunitymonitoring system for themembership.

Heads of Administration to provide areport detailing all trainingundertaken by the president,chairmen and members of theirValuation Tribunals by 30 April 2004.

Central record of current levels ofknowledge for the VTS membership.

Fully achieved.

Heads of Administration to supply theTraining Manager with details of alltraining undertaken by Presidents,Chairmen and Members.

Set up interim recording system tomonitor attendance of members attraining events.

Fully achieved.

In consultation with presidents,review current status of members’appraisal undertaken by tribunalswithin their administrative unit by30 April 2004.

Revise and evaluate trainingprogramme for members for roll outin January 2005, to include equalopportunities, human rights andinduction for new members.


Transfer information into MISdatabase.

Fully achieved.

Key Tasks To improve Equal Opportunities Monitoring

2004-2005







VTS Objective – Finance

What This Means

Key Tasks

Produce unqualified annual accounts.

Draft year-end timetable.

What This Means

Key Tasks

Ensuring expenditure is contained within resources available.

Draft year-end instructions.

What This Means

Key Tasks

Securing economy, efficiency and effectiveness and regularityand propriety.

Ensure compliance of accounts direction issued by the ODPMsponsoring team and HM Treasury guidance.

The Resource Director will issue to allstaff year-end timetable by February2005.

Year-end timetable on file with issueddated.

Fully achieved.

The Resource Director will issue to allstaff year-end instructions byFebruary 2005.

Year-end instructions on file withissued dated.

Fully achieved.

Statutory accounts produced by May2005 to include applicable elementsof ODPM accounts direction and HMTreasury guidance.

National Audit review of complianceof accounts direction.

Fully achieved.

Recommendations to beimplemented by March 2005.

Report to Audit Committee onimplementation of auditrecommendations.

Fully achieved.

Key Tasks All internal audit recommendation to be implemented.

2004-2005




The Resource Director will draftScheme of Delegation and Fraudpolicy by June 2005.

The Board to approve Scheme ofDelegation and Fraud policy.

Fully achieved.

The Resource Director will devise andimplement cost centre managementreporting system on SAP byMay 2004.

Budgetary reporting by cost centresavailable on SAP.

Fully achieved.

Continuation – VTS Objective – Finance

What This Means

Key Tasks

Implement adequate financial and accounting security.

Draft Scheme of Delegation and Fraud policy.


What This Means

Key Tasks

Implement cost effective cost centres across all regional units.

Devise cost centre and budgetary reporting on SAP.

Appendix 5 2004-2005


Glossary of pension terms

Actuarial Gains & Losses

Changes in actuarial deficits or surpluses that arise because:

• events have not coincided with the actuarial assumptions made for the last valuation (experiencegains and losses)

or

• the actuarial assumptions have changed.

Current Service Cost

The increase in the present value of the scheme liabilities expected to arise from employee service in thecurrent period.

Curtailment

Curtailments will show the cost of the early payment of pension benefits if any employee has beenmade redundant in the previous financial year.

Expected Rate of Return on Assets

The average rate of return expected over the remaining life of the related obligation on the actualassets held by the Scheme.

Interest on Pension Scheme Liabilities

The expected increase during the period in the present value of the scheme liabilities because thebenefits are one year closer to settlement.

Irrecoverable Surplus

The employer may not control or be able to benefit from the whole of a surplus – it may be so largethat the employer cannot absorb it all through reduced contributions. The amount recoverable throughreduced contributions reflects the maximum possible to be recovered without assuming an increase inthe number of employees covered by the scheme.

Past Service Cost

Discretionary benefits awarded on early retirement are treated as past service costs. This includes addedyears and unreduced pension benefits awarded before the rule of 85 age.

Projected Unit Method

An accrued benefits valuation method in which the scheme liabilities make allowance for projectedearnings. An accrued benefits valuation method is a valuation method in which the scheme liabilities atthe valuation date relate to:

• the benefits for pensioners and deferred pensioners and their dependants, allowing whereappropriate for future increases; and

• the accrued benefits for members in service on the valuation date.

2004-2005


Rule of 85 Age

The date on which the sum of

• the member’s age in whole years on the date his local government employment ends or the datehe elects for payment, if later,

• his total membership in whole years, and

• in a case where he elects after his local government employment ends, the period beginning withthe end of that employment and ending with the date he elects for payment,

equals 85 years.

The rule of 85 can be reached prior to age 60, however benefits can only be paid prior to age 60 if theemployer permits it. Therefore, generally for the calculations where Hymans Robertson is actuary to theFund, we assume a minimum of age 60 for the rule of 85. The Funds with different advisors may havemade different assumptions in their calculations.

Settlement

Settlements will take account of outgoing bulk transfers and will show the difference between theFRS 17 liability and the amount paid to settle the liability.

Appendix 6 2004-2005


Map of administrative units

Yorkshire Admin Unit

East Midlands Admin Unit

Eastern Admin Unit

Home Counties North Admin Unit

Home Counties SouthAdmin Unit

London North Admin Unit

London South Admin Unit

Southern Admin Unit

Wessex Admin Unit

South West Admin Unit

Isles of Scilly

Thames Valley Admin Unit

West Midlands Admin Unit

North West Admin Unit

Northern Admin Unit

Northumberland

Tyne & Wear

DurhamCumbria

Teesside

East YorkshireWest Yorkshire

Lancashire

Greater Manchester

Cheshire

MerseysideSouth Yorkshire

LincolnshireNottinghamshire

Derbyshire

Staffs

Shropshire

W Midlands

Hereford & Worcester

Leicestershire

NorthamptonshireCambridgeshire

Norfolk

Suffolk

EssexBucks

Hertfordshire

Warwickshire

OxfordshireGloucestershire

Wiltshire

Somerset

Dorset

Devon

Cornwall

Hampshire

Isle of Wight

West Sussex

Surrey

East Sussex

Kent

Greater London

Berkshire

North Yorkshire

Bedfordshire

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